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Why Is MasTec (MTZ) Up 2.7% Since the Last Earnings Report?
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A month has gone by since the last earnings report for MasTec, Inc. (MTZ - Free Report) . Shares have added about 2.7% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock’s next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
MasTec reported fourth-quarter 2016 adjusted earnings per share of $0.68 (excluding one-time items barring non-cash stock compensation expense), a substantial year-over-year improvement of 278%. Further, earnings beat the Zacks Consensus Estimate of $0.50 by a comfortable margin of 18% and came ahead of management's guidance of $0.54 per share.
Including one-time items, MasTec reported earnings of $0.66 per share compared with a loss of $0.96 reported in the prior-year quarter.
Operational Update
MasTec’s net sales improved 31% year over year to $1.34 billion in the quarter, coming ahead of the Zacks Consensus Estimate of $1.32 billion, as well as management’s guidance of $1.3 billion. The better-than-expected performance came on the back of increase in revenues across all segments, particularly led by the Oil and Gas segment which recorded a surge of 62% year over year to $570 million.
The Electrical Transmission segment followed with a 40.5% rise to $100.2 million in revenues. The Communication segment witnessed 14% growth in revenues to $595.6 million; while revenues in the Power Generation and Industrial segment increased 2.3% to $81.1 million.
Cost of sales in the quarter advanced 22% year over year to $1,120 million. Gross profit soared a whopping 99% to $221 million from $111 million in the prior-year quarter. Gross margin expanded 570 basis points to 16.5% in the quarter.
General and administrative expenses increased 12.9% to $66.4 million. MasTec reported operating profit of $155 million in the quarter, a 196% jump from $52.4 million in the year-earlier quarter. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) were $154 million, compared with $82 million in the year-ago quarter.
Financial Details
MasTec reported cash and cash equivalents of $38.8 million at the end of 2016, up from $5 million as of Dec 31, 2015. The company generated cash flow from operations of $205.6 million in 2016 as against $367.4 million in 2015. Long-term debt was $961.4 million as of Dec 31, 2016, compared with $933 million as of Dec 31, 2015.
Guidance
For full-year 2017, MasTec guided adjusted earnings per share guidance to approximate $2.35, a 24% increase over 2016. Revenues are now projected to grow 7% to $5.5 billion. Additionally, the company estimates its adjusted EBITDA to climb 15% to $550 million.
Additionally, first-quarter 2017, MasTec guided revenues to be roughly $1.05 billion. The company anticipates adjusted EBITDA of around $125 million and adjusted earnings per share of $0.51.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed an upward trend in fresh estimates. There have been two upward revisions for the current quarter. In the past month, the consensus estimate also shifted upward by 94.1% due to these changes.
At this time, MasTec's stock has a strong Growth Score of 'A', though it is lagging a lot on the momentum front with a 'C'. Charting a somewhat similar path, the stock was allocated a grade of 'A' on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'A'. If you aren't focused on one strategy, this score is the one you should be interested in.
Based on our scores, the stock is equally suitable for growth and value investors.
Outlook
Estimates have been trending upward for the stock. The magnitude of these revisions also looks promising. It comes with little surprise that the stock has a Zacks Rank #2 (Buy). We are expecting an above average return from the stock in the next few months.
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Why Is MasTec (MTZ) Up 2.7% Since the Last Earnings Report?
A month has gone by since the last earnings report for MasTec, Inc. (MTZ - Free Report) . Shares have added about 2.7% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock’s next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
MasTec Tops Q4 Earnings, Revenues; Offers '17 View
MasTec reported fourth-quarter 2016 adjusted earnings per share of $0.68 (excluding one-time items barring non-cash stock compensation expense), a substantial year-over-year improvement of 278%. Further, earnings beat the Zacks Consensus Estimate of $0.50 by a comfortable margin of 18% and came ahead of management's guidance of $0.54 per share.
Including one-time items, MasTec reported earnings of $0.66 per share compared with a loss of $0.96 reported in the prior-year quarter.
Operational Update
MasTec’s net sales improved 31% year over year to $1.34 billion in the quarter, coming ahead of the Zacks Consensus Estimate of $1.32 billion, as well as management’s guidance of $1.3 billion. The better-than-expected performance came on the back of increase in revenues across all segments, particularly led by the Oil and Gas segment which recorded a surge of 62% year over year to $570 million.
The Electrical Transmission segment followed with a 40.5% rise to $100.2 million in revenues. The Communication segment witnessed 14% growth in revenues to $595.6 million; while revenues in the Power Generation and Industrial segment increased 2.3% to $81.1 million.
Cost of sales in the quarter advanced 22% year over year to $1,120 million. Gross profit soared a whopping 99% to $221 million from $111 million in the prior-year quarter. Gross margin expanded 570 basis points to 16.5% in the quarter.
General and administrative expenses increased 12.9% to $66.4 million. MasTec reported operating profit of $155 million in the quarter, a 196% jump from $52.4 million in the year-earlier quarter. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) were $154 million, compared with $82 million in the year-ago quarter.
Financial Details
MasTec reported cash and cash equivalents of $38.8 million at the end of 2016, up from $5 million as of Dec 31, 2015. The company generated cash flow from operations of $205.6 million in 2016 as against $367.4 million in 2015. Long-term debt was $961.4 million as of Dec 31, 2016, compared with $933 million as of Dec 31, 2015.
Guidance
For full-year 2017, MasTec guided adjusted earnings per share guidance to approximate $2.35, a 24% increase over 2016. Revenues are now projected to grow 7% to $5.5 billion. Additionally, the company estimates its adjusted EBITDA to climb 15% to $550 million.
Additionally, first-quarter 2017, MasTec guided revenues to be roughly $1.05 billion. The company anticipates adjusted EBITDA of around $125 million and adjusted earnings per share of $0.51.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed an upward trend in fresh estimates. There have been two upward revisions for the current quarter. In the past month, the consensus estimate also shifted upward by 94.1% due to these changes.
MasTec, Inc. Price and Consensus
MasTec, Inc. Price and Consensus | MasTec, Inc. Quote
VGM Scores
At this time, MasTec's stock has a strong Growth Score of 'A', though it is lagging a lot on the momentum front with a 'C'. Charting a somewhat similar path, the stock was allocated a grade of 'A' on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'A'. If you aren't focused on one strategy, this score is the one you should be interested in.
Based on our scores, the stock is equally suitable for growth and value investors.
Outlook
Estimates have been trending upward for the stock. The magnitude of these revisions also looks promising. It comes with little surprise that the stock has a Zacks Rank #2 (Buy). We are expecting an above average return from the stock in the next few months.