SARASOTA, Fla.—For the fifth quarter in a row, Global Signal Inc. blamed its net losses on the company’s $1.2 billion cash purchase of 6,600 Sprint Nextel Corp. towers, which the company announced in May 2005.
Global Signal said its second-quarter net losses grew to $17 million, due to an 88.7-percent increase in direct site operating expenses of $56.9 million from the Sprint Nextel transaction. The year-ago direct site operating expenses totaled $30.1 million, contributing to the company’s net losses of $9.4 million at that time.
Losses from continuing operations climbed to $16.7 million from $9.7 million a year ago. The company said other general costs, including depreciation, amortization and accretion, increased to $59.9 million from $41.1 million a year ago.
However, the acquisition of the Sprint Nextel sites helped Global Signal’s revenue rise 58 percent to $122.5 million compared with the year-ago total of $77.6 million.
During a conference call, Global Signal said Sprint Nextel’s announcement about its fourth-generation network buildout plans would provide significant benefit to Global Signal’s bottom line. Raymond James analyst Marc DeRussy agreed, noting that Sprint Nextel’s 4G plans will likely help the entire tower industry. However, DeRussy pointed out that since Sprint Nextel is already a significant customer of Global Signal’s, the tower company stands to gain a great deal of site rental revenues from the network buildout.
Jerry Elliot, chief executive officer of Global Signal, said, “We showed some good growth on the top line and we are seeing a lot of demand for tower space, very solid lease-up and strong future revenue.”
Elliott was named Global Signal’s new president and CEO in mid-April, succeeding Wesley Edens, who now serves as chairman of the company’s board. At the same time, Global Signal also hired Steven Osgood as its new chief financial officer to replace William Freeman, who retired at the end of April.
As of the end of the quarter, Global Signal reported ownership of about 11,000 towers, placing it No. 3 among the nation’s tower companies. Crown Castle International Corp. is the No. 2 tower company with more than 13,000 sites, and American Tower Corp. sits securely in the top spot with more than 22,000 sites.
