Uniti Group Inc. of Little Rock (Nasdaq:UNIT) on Thursday reported a $30.7 million profit in the fourth quarter, results that come after the company announced the sale of wireless towers and two fiber investments earlier this week.
The telecom real estate investment trust’s net income was down 25.4% from from $40.9 million in the fourth quarter of 2022. On a per-share basis, earnings came to 13 cents.
Funds from operations — a closely watched measure in the REIT industry — totaled $91.6 million, or 34 cents per share, in the quarter. The figure was down 20.6% from $115.3 million the previous year, but in line with Wall Street expectations.
Revenue in the period was $285.7 million, up slightly from $283.7 million a year ago but lower than Wall Street forecasts. Three analysts surveyed by Zacks Investment Research expected $296.6 million.
Shares of the company dipped 2% to $5.63 on the results Thursday morning. Year to date, shares were down 4%.
For the full year, revenue was $1.154 billion, down from $1.174 billion in 2022; funds from operations fell 15.4% from $455.1 million to to $385.3 million; and net loss widened from $9.4 million to $82.9 million.
In a statement, CEO Kenny Gunderman said non-recurring revenue was predictably lower in 2023 due to lower early termination fees and one-time low-margin equipment sales, which the company has decided to largely exit in 2024.
“Despite a challenging economic backdrop, Uniti successfully fully financed its current business plan by refinancing $3.1 billion of its outstanding debt in 2023, while also raising up to $437 million of additional capital through the ABS bridge financing and recent non-core asset sales at premium multiples” Gunderman said. “These initiatives result in our current business plan being fully funded, no material permanent debt maturities until 2027, and over 95% of our consolidated debt being fixed rate.”
Uniti on Monday announced asset sales totaling about $87 million in cash. The company sold its remaining investment interest in the fiber network operated by Bluebird Network LLC.
It also sold fiber network assets to CableSouth Media III LLC, doing business as SwyftFiber. The assets had been leased to SwyftFiber since a 2018 sale-leaseback transaction with Uniti. As part of the agreement, Uniti will continue to have access to certain strands within the SwyftFiber network at no cost.
Finally, Uniti completed the sale of “essentially all” of its remaining wireless towers to CTI Towers Inc., a portfolio company of Palistar Capital LP.
As of Sept. 30, Uniti owned about 139,000 fiber route miles, 8.4 million fiber strand miles, and other communications real estate throughout the U.S.
Bloomberg reported last week that Uniti and Windstream Holdings Inc. of Little Rock were in talks to reunite after Uniti spun off of Windstream in 2015. The telecom firms were said to be discussing a stock-based transaction in which Uniti would remain publicly traded. No agreement has been announced and talks could end without one, insiders told Bloomberg.
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