Real Estate
Crown Castle lifts 2026 outlook as fiber-sale proceeds raise AFFO per share 11%, even as tower rental revenue falls 5%
The first full quarters as a pure-play US tower company show a smaller share count and lower interest costs offsetting DISH-related churn.
HedgeWeekly News Desk ·
Crown Castle reported adjusted funds from operations of $530 million, or $1.24 a share, for the third quarter, up from $490 million, or $1.12, a year earlier, the tower REIT said after the market close on Wednesday. The per-share figure was ahead of the $1.21 consensus cited by GuruFocus. Site rental revenues fell 5% to $966 million and net income dropped 12% to $283 million, or 67 cents a diluted share.
The company raised its 2026 outlook at the midpoint: site rental revenues to $3.875 billion from $3.855 billion, adjusted EBITDA to $2.715 billion from $2.69 billion, and AFFO per share to $4.60 from $4.59. Chief financial officer Sunit Patel attributed the increase to ground lease buyouts, operating efficiencies and an agreement with a customer. Discretionary capital spending guidance rose by $40 million at the midpoint to fund more ground lease purchases, while core leasing activity is now expected near the low end of its $60 million to $70 million range.
Crown Castle completed the $8.5 billion sale of its fiber business on May 1, with EQT taking the small cells unit and Zayo the fiber solutions arm, for net cash proceeds of $8.4 billion after preliminary adjustments of $124 million that remain subject to settlement. The company said the proceeds cut interest expense and its share count, which lifted AFFO per share. Terminations by DISH reduced organic billings by $61 million in the quarter; adjusted for those and Sprint cancellations, organic growth was 3.5%, against 4.1% a year earlier.
For REIT and income investors, the quarter shows the per-share math of the asset sale doing the work while the underlying tower business slows: revenue and EBITDA are lower, and the quarterly dividend of $1.0625 a share is unchanged from a year ago. Debt is 97% fixed-rate with a weighted average maturity of about seven years. The points to watch are whether carrier leasing recovers from the low end of guidance, how much further DISH churn weighs on billings, and the final settlement of the fiber-sale adjustments.