Uniti Writes Down Goodwill Value, Posts $156M Loss in Q3

Uniti Writes Down Goodwill Value, Posts $156M Loss in Q3
Kenny Gunderman, CEO of Uniti Group (Uniti Group)

Uniti Group Inc. of Little Rock (Nasdaq: UNIT) on Thursday posted a third-quarter loss of $155.9 million as it reduced the value of the goodwill for its Uniti Fiber segment.  

The real estate investment trust said a $216 million goodwill impairment charge in the segment was "driven by an increase in the macro interest rate environment." The charge brought expenses in the quarter to $452.6 million, doubling costs from the same period a year ago.

But after booking its sixth straight quarter of rising new sales, the real estate investment trust raised its revenue outlook for the full year from $1.12 billion to $1.14 billion. Uniti previously expected a $12 million loss in 2022, but now projects a $6 million gain. 

"Uniti remains well positioned to weather the current economic headwinds through our $7 billion of revenue under contract with an average remaining term of 8 years, the strengthening of our balance sheet, lower capital intensity, and with 96% of our debt fixed-rate and no significant debt maturities before mid-2024," CEO Kenny Gunderman said in a statement.

Losses in the quarter amount to 66 cents per share. 

Uniti posted revenue of $283.1 million, which beat Wall Street forecasts. Three analysts surveyed by Zacks expected $282.4 million.

Year-over-year growth in funds from operations, a key measure of profitability in the REIT industry, slowed from 11% in the second quarter to 2.4% in the third quarter. Uniti reported funds from operation of $112.6 million, or 43 cents per share.

During the quarter, Uniti Leasing deployed capital expenditures of $71.9 million primarily related to the construction of approximately 2,250 new miles of fiber infrastructure.

The company reported $4.81 billion in assets.

Shares of the company were down more than 3% late Thursday morning. For the year to date, shares were down 50%.

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