Uniti bounces back in 1Q, reports profit of $52.9M

Graphs showing Uniti Group Inc. first quarter information.
Graphs showing Uniti Group Inc. first quarter information.

Uniti Group Inc. opened 2022 with a return to profitability, producing net income of $52.9 million and earnings per share of 21 cents, which rebounded from a loss of 2 cents per share in the first quarter of 2021, the company announced Thursday. Uniti lost $4.5 million in the first quarter a year ago.

Revenue for the first quarter ended March 31 was up 2%, increasing to $278 million from $272.6 million in the same period last year.

"We continue to see robust demand for our portfolio of mission-critical communications infrastructure," Chief Executive Officer Kenny Gunderman said on a conference call Thursday. "Our strong first-quarter results exceeded our expectations and we're enthusiastic about the balance of the year."

Uniti's results, however, fell below consensus forecast of earnings per share of 42 cents, according to projections compiled by Zacks Investment Research.

The Little Rock company, which operates as a real estate investment trust, leases fiber to the nation's largest wireless carriers and broadband service providers to support deployment of high-speed internet and communications services across the nation.

Company officials said Thursday that demand for Uniti's fiber network continues to grow, with substantial opportunities to expand in major metropolitan areas. Consolidated customer bookings were up 58% in the first quarter, the fourth consecutive quarter the company has seen an increase.

"Fiber has never been more valuable and the insatiable demand that we're seeing for these assets shows no signs of slowing," Gunderman told industry analysts on Thursday's call.

Promoting a mix of anchor customers -- mostly large enterprises with long-term agreements -- and individual leases are "the most effective way to drive profitable growth," Gunderman said, noting that Uniti is a "business that's relatively immune to swings in the economy."

Uniti has about 3 million miles of dark, or unused, fiber stretching across the nation.

"We have a great opportunity to grow our business by lighting more of our network in a disciplined manner," Gunderman said. "We're beginning to do that when we find appropriate anchor customers."

The company services 20 metropolitan markets though Uniti owns or has access to fiber in 300 metro areas nationwide, which provides "terrific growth potential," according to Gunderman. "We continue to actively prioritize these markets for expansion."

In addition, the fiber provider remains open to merger-and-acquisition activity to grow its business, with the ability to sell individual assets or parts of the business in a tax-efficient manner, Gunderman said, noting that the ability to chip off assets for sale could "facilitate acquisitions outside our traditional southeast footprint."

The company, he said, is seeking merger-and-acquisition opportunities and is in "continued productive conversations with various strategic and financial parties."

Uniti owns about 129,000 fiber route miles, 7.7 million fiber strand miles and other communications real estate throughout the United States.

The stock was down 4.25% to $11.94 at closing Thursday, mirroring a broad drop in stock prices.

Upcoming Events