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MasTec (MTZ) Shares Up on Q2 Earnings Beat, View Raised

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MasTec, Inc.’s (MTZ - Free Report) shares grew 3.6% in after-hours trading on Aug 5, after it reported second-quarter 2021 results, wherein earnings handily surpassed the Zacks Consensus Estimate. The company’s earnings surpassed the consensus mark for the 23rd consecutive quarter. Although revenues missed estimates, the figure improved on a year-over-year basis. Backed by strong second-quarter results, the company raised its 2021 EPS guidance.

Jose Mas, MasTec's CEO, said, "Jose Mas, MasTec's Chief Executive Officer, commented, "We are pleased with our strong second quarter results with over $3 billion in second quarter booking activity, resulting in over $9 billion in quarter-end backlog, a new all-time record level for MasTec. This performance highlights the accelerating level of end market opportunities across our non-Oil & Gas segments."

Inside the Headlines

MasTec reported adjusted earnings of $1.30 per share, which surpassed the Zacks Consensus Estimate of $1.25 by 4%. On a further encouraging note, the metric grew 36.8% from 95 cents per share in the prior-year quarter.

Revenues of $1.96 billion missed the consensus mark of $2.01 billion by 6% but increased 25.1% year over year. At quarter-end, the company had an 18-month backlog of $9.2 billion (a new all-time high), up 17% sequentially and 13% year over year.

MasTec, Inc. Price, Consensus and EPS Surprise

MasTec, Inc. Price, Consensus and EPS Surprise

MasTec, Inc. price-consensus-eps-surprise-chart | MasTec, Inc. Quote

Segment Update

Revenues from Communications fell 3.7% year over year to $630.4 million. However, adjusted EBITDA margin was down 20 basis points (bps) to 11.5%.

Electrical Transmission segment’s revenues came in at $232.5 million, up 87.3% from the year-ago quarter. Adjusted EBITDA margin came in at 4% against negative adjusted EBITDA margin of 2.6% in the year-ago period.

Clean Energy and Infrastructure’s revenues increased 13% year over year to $481.5 million. However, adjusted EBITDA margin of 3.2% declined 390 bps from the year-ago figure.

Revenues from the Oil and Gas segment rose a notable 68.6% from the year-ago figure to $621.4 million. Adjusted EBITDA margin also improved 50 bps to 22.2%.

Operational Update

The company reported adjusted EBITDA of $230.2 million, up 38.9% from the prior-year period. Adjusted EBITDA margin also improved 110 bps to 11.7%.

Financial Details

As of Jun 30, 2021, MasTec had cash and cash equivalents of $2,408.3 million compared with $2,359 million at 2020-end. In first-half 2021, the company provided $349.3 million of cash from operating activities compared with $467.2 million a year ago.

MasTec ended the second quarter with a liquidity of $1.2 billion.

Updates 2021 Guidance

The company now expects to generate record revenues of $8.1 billion in 2021, down from previous projection of $8.2 billion. Adjusted EBITDA is expected to be $930 million (suggesting growth from $810 million in 2020). Adjusted earnings are anticipated to be $5.45 per share, indicating an increase from the prior projection of $5.40. The estimated figure indicates an increase from $5.11 reported in 2020.

Third-Quarter View

MasTec expects third-quarter revenues of $2.3 billion. Adjusted EBITDA is estimated to be $267 million, suggesting growth from $264.8 million reported a year ago. Adjusted EBITDA margin is expected to be 11.6%, indicating a decline from 15.6% a year ago. Adjusted earnings per share for the third quarter are expected to be $1.71, pointing to a decline from $1.83 in the prior-year period.

Zacks Rank

MasTec — which shares space with EMCOR Group, Inc. (EME - Free Report) , Dycom Industries Inc. (DY - Free Report) and Great Lakes Dredge & Dock Corp. (GLDD - Free Report) in the Zacks Building Products - Heavy Construction industry — currently carries a Zacks Rank #3 (Hold).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.