Quanta to Sell Fiber Optic Business to Crown Castle for $1 Billion

By Chelsey Dulaney 

Quanta Services Inc. has agreed to sell its fiber-optic licensing business to Crown Castle International Corp. for $1 billion in cash, while the company cut its earnings outlook for the year.

Quanta expects after-tax proceeds of $800 million from the deal, while Crown Castle expects the acquisition to more than double its small-cell fiber footprint and be immediately accretive.

The deal is expected to close by the end of the year.

Meanwhile, Quanta gave disappointing guidance for the year and current quarter, citing lower-than-expected first-quarter results, as well as regulatory and permitting challenges.

For the year, Quanta is now expecting $1.94 to $2.14 a share in earnings, down from its previous forecast for $2.04 to $2.29.

For the current quarter, Quanta forecast per-share earnings of 42 cents to 48 cents on revenue of $1.95 billion to $2.05 billion. Analysts had forecast 53 cents a share in earnings on $2.04 billion in revenue.

For the quarter ended March 31, Quanta reported a profit of $53.5 million, down from $54.4 million a year ago. Per-share earnings were flat at 25 cents a share.

Excluding items, per-share earnings were 31 cents.

Quanta had forecast earnings of 37 cents to 43 cents a share in February.

Revenue fell 7% to $1.89 billion. The company had forecast revenue of $1.8 billion to $1.9 billion.

Write to Chelsey Dulaney at [e-mail]

Access Investor Kit for Quanta Services, Inc.

Visit http://www.companyspotlight.com/partner?cp_code=P479&isin=US74762E1029

Subscribe to WSJ: http://online.wsj.com?mod=djnwires