Crown Castle Announces Strategic Changes

Crown Castle Inc. has announced significant operational changes and updates to its outlook for the full year 2024, following a comprehensive strategic and operational review of its fiber segment. The company has focused on higher return projects, resulting in a substantial reduction of approximately $300 million in capital expenditures and $60 million in expense savings. These changes are aimed at driving operational efficiencies and enhancing returns in fiber solutions and small cells.

As a result of the modified strategy, Crown Castle expects to reduce gross capital expenditures in its fiber segment by $275 million to $325 million in 2024. Additionally, the company is reducing staffing levels by more than 10% from current levels, which is expected to generate approximately $100 million in annualized run-rate cost savings, with approximately $60 million benefitting the full year 2024 results.

The company believes that these changes will lower capital expenditures on lower-return opportunities while maintaining expectations for revenue growth across towers, small cells, and fiber solutions over the next several years.

In its fiber solutions business, Crown Castle anticipates reducing discretionary capital expenditures going forward, aiming for annual organic revenue growth of 2% in 2024 as it transitions to the new sales strategy before returning to long-term annual organic revenue growth of 3% beginning in 2025.

The operational changes, along with other delays in delivering some in-process small cell projects, are expected to result in a reduction of 3,000 to 5,000 new revenue-generating small cell nodes in 2024 and a reduction in new leasing activity of approximately $15 million in the year. Despite these adjustments, the company continues to believe there is sufficient demand to grow small cell revenues by double digits over the next several years.

As a result of these announcements, the company's shares have moved 1.2% on the market, and are now trading at a price of $101.07. For more information, read the company's full 8-K submission here.

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