Uniti Reports Rising Profit in Q4, $8M Loss for Full Year

Uniti Reports Rising Profit in Q4, $8M Loss for Full Year
Kenny Gunderman (Uniti Group)

Uniti Group Inc. of Little Rock (Nasdaq: UNIT) on Friday reported an $8.1 million loss in 2022 despite rising profit in the fourth quarter.

The annual loss comes after the real estate investment trust posted a $124.7 million profit the previous year.

Uniti, a spinoff of Windstream Holdings Inc. of Little Rock, also reported another writedown in the value of its fiber segment due to rising interest rates. The goodwill impairment charge in the fourth quarter was $24.5 million, bringing those charges for the full year to $240.5 million.

Fourth-quarter net income was just under $41 million, up 14% from $36 million in the same period a year ago. Earnings on a per-share basis came to 13 cents.

Revenue in the period was $283.7 million, down 3.2% from $293 million a year ago and short of Wall Street expectations. Three analysts surveyed by Zacks expected $285.5 million.

During the quarter, Uniti Leasing deployed capital expenditures of $85.5 million primarily related to the construction of approximately 1,950 new route miles of fiber infrastructure.

Funds from operations rose 1.8% in the quarter to $119.5 million, or 44 cents per share. Funds from operations, or FFO, is a closely watched measure in the REIT industry that takes net income and adds back items such as depreciation and amortization.

On an annual basis, Uniti's FFO growth slowed from 10% to 5.8%.

Still, Uniti saw a record level of annual bookings and installs in 2022, pushing annual revenue up 2.5% to $1.1 billion. CEO Kenny Gunderman said he expects demand to remain strong in 2023 "as demand for our product offerings remains robust and the need for higher bandwidth and dense fiber networks continues to grow."

After recent debt refinancings, Uniti has no significant debt maturities for nearly five years, Gunderman said. "Essentially all of our outstanding debt is fixed rate, and our current organic growth plan is effectively fully funded, providing Uniti significant advantages during the current uncertain economic and credit market conditions," he said.

With those factors in mind, the company raised its expected revenue for 2023 from $1.15 billion to $1.17 billion. The stronger guidance comes after the company reported a major deal for dark fiber connectivity for a "larger global internet provider" that it has not named.

Uniti finished 2022 with $4.85 billion in assets.

Shares of the company were down about 2% late Friday morning.

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