Crown Castle cuts annual profit forecast, reduces workforce amid fiber business review

(Reuters) - Telecommunications infrastructure company Crown Castle on Tuesday cut its annual profit forecast and said it will reduce its workforce by 10% as a result of an operational review of its fiber business.

Crown had initiated a strategic and operating review of its fiber business, which made up about 32% of the company's revenue in the quarter ended Mar. 31, in December last year after reaching a deal with activist investor Elliott Investment Management.

Elliott, which disclosed a $2 billion stake in the company in November, had been pushing Crown to consider selling the fiber business. As part of the deal, Crown also replaced two board directors.

The Houston, Texas-based company said it expects to reduce gross capital expenditures at its fiber segment by $275 million to $325 million in 2024 and expects annual organic revenue growth of about 3% in the fiber solutions segment beginning in 2025.

The move is expected to save Crown, which runs 90,000 route miles of fiber in the U.S., $100 million in annualized run-rate cost savings.

Last year, the company had initiated a restructuring plan which included reducing total headcount by 15%.

It also plans to concentrate on areas close to its existing networks and increase its focus on specific wireless projects.

The company said while it has concluded its operational review, the strategic review of the business is remains underway.

Crown revised the midpoint of its 2024 net income forecast to about $1.16 billion, compared to the previous midpoint of $1.25 billion.

Analysts on average expected a net income of $1.25 billion for fiscal year 2024, according to LSEG data.

Crown Castle co-founder and former CEO Ted Miller, who now runs investment fund Boots Capital, said in February the company could fetch as much as $15 billion by selling its fiber assets.

(Reporting by Arsheeya Bajwa in Bengaluru; Editing by Tasim Zahid)