SBA Communications misses quarterly revenue estimates on muted demand

Feb 26 (Reuters) - Cell tower owner SBA Communications SBAC.O missed Wall Street estimates for fourth-quarter revenue on Thursday, as customer churn and cautious carrier spending weighed on its site-leasing business.

The telecommunications infrastructure sector is preparing for a potential shake-up among its primary tenants, with the phase-out of redundant technology expected to create significant churn and weigh on long-term revenue projections as older sites go offline.

High modernization costs are also squeezing out small carriers with limited budgets. Giants T-Mobile TMUS.O, AT&T T.N, and Verizon VZ.N accounted for a combined 66.2% of SBA's total revenue in 2024.

Analysts have noted that while there has not been a surge in new construction, leasing activity from T-Mobile and Verizon remains steady.

SBA has also moved into international markets in search of new growth segments, recently buying thousands of tower locations from Millicom in Latin America.

The company owned or operated 46,328 communication sites as of December 31.

Fourth-quarter revenue came in at $719.6 million, missing analysts' average estimate of $726.2 million, according to data compiled by LSEG.

SBA expects full-year revenue to be between $2.82 billion and $2.86 billion. At the mid-point of its range, the forecast was below estimates of $2.86 billion.

Quarterly adjusted funds from operations came in at $3.19 per share, compared with estimates of $3.25 apiece.