After profits rose in the final quarter of 2022, Uniti Group Inc. of Little Rock (Nasdaq:UNIT) reported losses of $19.2 million in the first three months of 2023, the company announced in an earnings report Thursday morning.
The loss, which amounts to eight cents per share, comes after the company posted a $52.9 million profit in the same quarter a year ago. Executives at the real estate investment trust attributed the losses to “ongoing macroeconomic challenges,” including inflation and supply chain issues.
Uniti said it had funds from operations of $107.4 million, or 39 cents per share, in the period, which beat Wall Street expectations. The average estimate of three analysts surveyed by Zacks Investment Research was for funds from operations of 37 cents per share.
Funds from operations is a closely watched measure in the REIT industry. It takes net income and adds back items such as depreciation and amortization.
Uniti, a spinoff of Windstream Holdings Inc. of Little Rock, reported first-quarter revenue of $289.8 million, about a 4% increase from the same period in 2022.
"Our business remains predominantly resilient and the demand for our product offerings and services has not waned," Kenny Gunderman, Uniti president and CEO, said in a statement. "To ensure that we are fully taking advantage of the current opportunity set within our industry, we continue to desnify our networks in order to maximize our lease-up potential in existing markets, as well as evaluate new markets for expansion within our southeast footprint.
"These industry tailwinds, combined with the steps we have taken to strengthen our balance sheet and push out maturities, with over 97% of our outstanding debt maturing in 2027 or later, positions Uniti to be successful now and in the long term," Gunderman said.
Uniti Fiber contributed $78 million in revenue in the quarter, while its leasing division revenue contributed $210.8 million. Uniti Fiber's capital expenditures were $36.1 million.
The company said that during the first quarter, Uniti Leasing's capital expenditures topped $71 million. Those funds were allocated mainly for the construction of about 1,200 miles of fiber infrastucture.
Uniti acquires and constructs communications infrastructure and provides fiber and other wireless solutions for the communications industry. As of March 31, it owns approximately 137,000 fiber route miles, 8.3 million fiber strand miles as well as other communications real estate in the U.S.
Shares of the company jumped 8% Thursday morning. For the year to date, shares were down 40%.
The Associated Press contributed information to this report.