MasTec Inc.

MasTec, Inc. (MTZ) has posted record revenue levels as it posted its fourth earnings surprise in the past 4 quarters. The company also reiterated its guidance for 2008 and 2009.

Company Description

MASTEC INC. is one of the largest providers of construction services to the telecommunications industry in the United States. The Company's principal business consists of the installation and maintenance of aerial, underground and buried copper and fiber optic cable, underground conduit, manhole systems and related construction for local telephone companies.

The companies include Regional Bell Operating Companies and non-Bell local telephone companies such as Sprint Corp., and GTE Corp.

Record Revenue

On Nov 5 MasTec announced its third-quarter results that included $398 million in revenue. Revenue rose 49% year-over-year, from $267, to the record high for the company.

Earnings per share also rose dramatically to 36 cents per share, up from just 18 cents on year ago. The announcement was the fourth earnings surprise in the past 12 months as analysts were expecting 32 cents on average.

MasTec made significant efforts to expand amongst its utility customers, which not comprise 32% of the company's revenue, up from 20% on year ago.

Bullish Guidance

The company reiterated 2008 earnings guidance of between 93 and 96 cents per share on Dec 3. 2008 earnings were raised in the Nov 5 earnings announcement to between $1.325 billion and $1.345 billion.

Full-year guidance for 2009 is $1.05 to $1.15 per share, with the estimate range to be between $1.95 billion and $2.0 billion.

Acquisition For Less Cash Than Planned

MasTec originally announced on Oct 6 that it would be buying Wanzek Construction Inc for $200 million and take on $15 million in debt. However, on Dec 3 the company released revised terms that included a payment of $50 million cash. 7.5 million shares of common stock, a $55 million convertible note and take on the $15 million in debt.

MasTec will also split Wanzek's earnings above $40 million for the first 2 years. The acquisition of Wanzek, a wind energy and natural gas producer, puts MasTec in position to compete in the alternative energy market.

The Chart

Shares of MTZ rallied strongly off of its 52-week low. The chart will look much more appealing if the stock can break through the $10 level. Take a look at the chart below.

Read the full analyst report on MTZ