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MasTec (MTZ) Q2 Earnings Top Estimates, View Up, Shares Rise
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MasTec, Inc.’s (MTZ - Free Report) shares gained 10.2% in the after-hour trading session on Aug 1, after the company came up with better-than-expected results in second-quarter 2019. Encouragingly, MasTec lifted its view for 2019.
MasTec reported adjusted earnings per share (EPS) of $1.60, surpassing the Zacks Consensus Estimate of $1.12 by an impressive 42.9%. Also, the reported figure exceeded the company’s expectation by 49 cents and increased an impressive 54% from the prior-year figure of $1.04.
Revenues of $1,939 million topped the consensus mark of $1,809 million by 7.2%. The reported figure also increased 19.9% on a year-over-year basis, primarily driven by higher contribution from Power Generation and Industrial, Electrical Transmission, as well as Oil and Gas businesses.
Its 18-month backlog as of Jun 30, 2019 was a record $7.8 billion, up $51 million from the corresponding period of last year.
Segment Update
Revenues from Communications improved 5.5% year over year to $652.6 million. Adjusted EBITDA margin, however, contracted 380 basis points (bps) to 8%.
Electrical Transmission segment’s revenues came in at $100.4 million, up 18.8% from the year-ago quarter. Adjusted EBITDA margin came in at 8.6% versus negative margin of 3.2% a year ago.
Power Generation and Industrial’s revenues surged 71.4% year over year to $250.2 million. However, adjusted EBITDA margin fell 320 bps from the prior-year quarter to 3.5%.
Revenues from the Oil and Gas segment increased 21.8% from a year ago to $936.8 million. In addition, adjusted EBITDA margin improved an impressive 320 bps to 19.1%.
General and administrative expenses rose 4.8% from the prior-year quarter to $70.8 million.
The company’s adjusted EBITDA came in at $240.7 million in the reported quarter, up 26% from $191.1 million in the prior-year period. Adjusted EBITDA margin also surged 60 bps to 12.4%.
Financial Details
MasTec reported cash and cash equivalents of $59.2 million as of Jun 30, 2019 compared with $27.4 million at 2018-end. Long-term debt was $1.25 billion as of Jun 30, 2019 compared with $1.32 billion on Dec 31, 2018.
The company provided $351.5 million of cash from operating activities in the first six months of 2019 compared with $23.2 million in the year-ago period.
2019 Guidance Lifted
Full-Year 2019
MasTec upwardly revised revenue expectation to roughly $7.7 billion from prior projection of $7.6 billion. Adjusted EBITDA is now projected at $836 million versus $795 million expected earlier, with adjusted EBITDA margin of 10.9%. Adjusted earnings per share are now anticipated at around $5.04 ($3.77 in 2018) versus $4.55 expected earlier.
Third-Quarter 2019
For the quarter, MasTec expects revenues to be $2.15 billion. Adjusted EBITDA is expected to be $246 million, with margin of 11.4%. Adjusted earnings per share are anticipated at $1.62, indicating growth from $1.33 reported in 2018.
Great Lakes’ EPS growth is expected to be 300% this year.
Dycom’s three-five year expected EPS growth rate is projected at 7.5%.
EMCOR’s EPS is expected to increase 14.5% in 2019.
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MasTec (MTZ) Q2 Earnings Top Estimates, View Up, Shares Rise
MasTec, Inc.’s (MTZ - Free Report) shares gained 10.2% in the after-hour trading session on Aug 1, after the company came up with better-than-expected results in second-quarter 2019. Encouragingly, MasTec lifted its view for 2019.
MasTec reported adjusted earnings per share (EPS) of $1.60, surpassing the Zacks Consensus Estimate of $1.12 by an impressive 42.9%. Also, the reported figure exceeded the company’s expectation by 49 cents and increased an impressive 54% from the prior-year figure of $1.04.
Revenues of $1,939 million topped the consensus mark of $1,809 million by 7.2%. The reported figure also increased 19.9% on a year-over-year basis, primarily driven by higher contribution from Power Generation and Industrial, Electrical Transmission, as well as Oil and Gas businesses.
Its 18-month backlog as of Jun 30, 2019 was a record $7.8 billion, up $51 million from the corresponding period of last year.
Segment Update
Revenues from Communications improved 5.5% year over year to $652.6 million. Adjusted EBITDA margin, however, contracted 380 basis points (bps) to 8%.
Electrical Transmission segment’s revenues came in at $100.4 million, up 18.8% from the year-ago quarter. Adjusted EBITDA margin came in at 8.6% versus negative margin of 3.2% a year ago.
Power Generation and Industrial’s revenues surged 71.4% year over year to $250.2 million. However, adjusted EBITDA margin fell 320 bps from the prior-year quarter to 3.5%.
Revenues from the Oil and Gas segment increased 21.8% from a year ago to $936.8 million. In addition, adjusted EBITDA margin improved an impressive 320 bps to 19.1%.
MasTec, Inc. Price, Consensus and EPS Surprise
MasTec, Inc. price-consensus-eps-surprise-chart | MasTec, Inc. Quote
Operational Update
General and administrative expenses rose 4.8% from the prior-year quarter to $70.8 million.
The company’s adjusted EBITDA came in at $240.7 million in the reported quarter, up 26% from $191.1 million in the prior-year period. Adjusted EBITDA margin also surged 60 bps to 12.4%.
Financial Details
MasTec reported cash and cash equivalents of $59.2 million as of Jun 30, 2019 compared with $27.4 million at 2018-end. Long-term debt was $1.25 billion as of Jun 30, 2019 compared with $1.32 billion on Dec 31, 2018.
The company provided $351.5 million of cash from operating activities in the first six months of 2019 compared with $23.2 million in the year-ago period.
2019 Guidance Lifted
Full-Year 2019
MasTec upwardly revised revenue expectation to roughly $7.7 billion from prior projection of $7.6 billion. Adjusted EBITDA is now projected at $836 million versus $795 million expected earlier, with adjusted EBITDA margin of 10.9%. Adjusted earnings per share are now anticipated at around $5.04 ($3.77 in 2018) versus $4.55 expected earlier.
Third-Quarter 2019
For the quarter, MasTec expects revenues to be $2.15 billion. Adjusted EBITDA is expected to be $246 million, with margin of 11.4%. Adjusted earnings per share are anticipated at $1.62, indicating growth from $1.33 reported in 2018.
Zacks Rank & Other Stocks to Consider
Currently, MasTec carries a Zacks Rank #2 (Buy). Other top-ranked stocks in the Zacks Construction sector include Great Lakes Dredge & Dock Corporation (GLDD - Free Report) , Dycom Industries, Inc. (DY - Free Report) and EMCOR Group, Inc. (EME - Free Report) . While Great Lakes carries a Zacks Rank #1 (Strong Buy), Dycom and EMCOR both carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Great Lakes’ EPS growth is expected to be 300% this year.
Dycom’s three-five year expected EPS growth rate is projected at 7.5%.
EMCOR’s EPS is expected to increase 14.5% in 2019.
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The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +98%, +119% and +164% in as little as 1 month. The stocks in this report could perform even better.
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