Crown Castle More Than Doubles Its Dividend -- Update

   By Josh Beckerman 
 

Crown Castle International Corp. (CCI) said Thursday it has sharply increased its dividend in a move that was sought by activist shareholder Corvex Management LP.

The provider of shared wireless infrastructure is boosting its annual payout to $3.28 a share from $1.40, effective with its December dividend.

The company, which operates as a real estate investment trust, also posted big increases in third-quarter revenue, net income and funds from operations.

Crown Castle increased its 2014 outlook for adjusted funds from operations to $4.19 to $4.20 a share. In July, it raised its view to $4.13 to $4.18 a share. Its 2015 estimate for that metric is $4.31 to $4.37 a share.

The company predicts higher leasing activity will continue during 2015, but also expects "a significant amount of tenant nonrenewals" amid industry consolidation, a trend that's likely to affect its growth over the next three to four years.

In late trading, Crown Castle shares were recently down 2% to $81.50.

In the third quarter, adjusted funds from operations were $1.05 a share, above the company's projection of $1 to $1.01 and the year-earlier figure of 83 cents.

Crown Castle reported net income of $108 million, or 29 cents a share, up from $46.5 million, or 16 cents a share, a year earlier. Revenue rose 24% to $930 million.

Although the company anticipates "headwinds" from nonrenewals, it expects to benefit as wireless companies upgrade their networks and said it anticipates small cell networks to contribute more to margin growth in the future.

Crown Castle said factors it considered in raising its dividend include "aligning of shareholder returns to the core business model" and "reinforcing confidence in the long-term, recurring nature of Crown Castle's cash flows."

Write to Josh Beckerman at [e-mail]

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