Crown Castle Earnings: Little Was Surprising in Muted Quarter, and Rest of Year Should Be Similar

As expected, Crown Castle's tower sales growth decelerated in the first quarter after record network spending by wireless carriers in 2022. Fiber segment growth was very weak, even as Sprint churn had only a negligible impact during the quarter. However, management maintained its full-year guidance, and small-cell deployments that will occur over the remainder of the year are generally locked in already. With a significant portion of the small-cell pipeline consisting of co-located—rather than anchor—nodes, we’ve become much less bearish on the business. We still don’t expect small cells to rival towers in terms of profitability, though. We’re maintaining our $140 fair value estimate and don’t believe the stock is materially undervalued.