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MasTec's (MTZ) Q3 Earnings Beat, Revenues Miss Estimates
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MasTec, Inc.’s (MTZ - Free Report) shares gained 4.1% during after-hours trading on Nov 3, after it reported third-quarter 2022 results, wherein earnings beat the Zacks Consensus Estimate, but revenues missed the same.
Elaborating on the performance and looking ahead, Jose Mas, MasTec's CEO, said, “The completion of the IEA acquisition marks an important milestone for MasTec, completing the strategic enhancement of our service capabilities and expertise to support the nation's energy transition to secure sustainable renewable sources. We believe that our expanded service offerings, scale and market leading capacity provide a compelling and complete suite of services to meet expected high customer demand growth for renewable power generation, power grid transmission and distribution and civil infrastructure over the next decade. Additionally, with the continued expected growth in Communications and stronger levels of pipeline services, we believe we have numerous strong long term growth opportunities."
Inside the Headlines
MasTec reported adjusted earnings of $1.34 per share, surpassing the Zacks Consensus Estimate of $1.29. In the year-ago period, the reported adjusted earnings were $1.89 per share. Notably, third-quarter results reflect acquisition integration costs, inflationary pressures, as well as a significant shift in 2022 operations to non-Oil & Gas segments.
Revenues of $2.5 billion missed the consensus mark by 1.2% but increased year over year from $2.4 billion a year ago. This upside was attributable to $600 million increase in non-Oil & Gas segment revenues, partially offset by $500 million decrease in the Oil & Gas segment revenues.
At September 2022-end, the company had an 18-month backlog of $11.2 billion, up 32% year over year.
Revenues from Communications grew 32.6% year over year to $888.9 million. Adjusted EBITDA margin was up 170 basis points (bps) to 12.4%.
Clean Energy and Infrastructure’s revenues increased 8.6% year over year to $563.2 million. Adjusted EBITDA margin was 4.4% versus 2.7% in the year-ago quarter.
Revenues from the Oil and Gas segment dropped 56.2% from the year-ago figure to $375.8 million. Adjusted EBITDA margin declined to 13.4% from 19.9% a year ago.
The Power Delivery (formerly known as Electrical Transmission) segment’s revenues came in at $688.4 million, up 88.4% from $365.3 million in the year-ago quarter. Adjusted EBITDA margin came in at 12.1%, up from 9.5% in the year-ago period.
Operational Update
The company reported an adjusted EBITDA of $245.6 million, down from $284.8 million in the prior-year period. The adjusted EBITDA margin declined to 9.8% from 11.8% in the year-ago quarter.
Financial Details
As of Sep 30, 2022, MasTec had cash and cash equivalents of $95.7 million, down from $360.7 million at 2021-end. Long-term debt (including finance leases) was $2.07 billion, up from $1.88 billion at 2021-end.
In the first nine months of 2022, the company provided $118.7 million cash from operating activities compared with $499.1 million a year ago.
2022 Guidance Updates
The company expects to generate revenues of $9.7 billion for 2022 versus $9.2 billion expected earlier. Adjusted EBITDA is expected to be $780 million versus $750 million of the earlier projection.
Adjusted earnings are anticipated to be $3.02 per share versus the earlier expectation of $3.09 per share. The estimated figure indicates a decrease from $5.58 reported in 2021. The Zacks Consensus Estimate for 2022 earnings is currently pegged at $3.09 per share.
Fourth-Quarter 2022 View
MasTec expects fourth-quarter revenues of $2.9 billion. Adjusted EBITDA is estimated to be $257 million. The adjusted EBITDA margin is expected to be 8.8%. The company expects to report adjusted earnings per share of $1.00 for the quarter. The Zacks Consensus Estimate for fourth-quarter 2022 earnings is currently pegged at $1.08 per share.
EMCOR Group, Inc. (EME - Free Report) reported third-quarter 2022 results, wherein earnings and revenues surpassed the Zacks Consensus Estimate and increased year over year.
Given the solid momentum of the business activity amid a challenging macroeconomic environment, the company has lifted its revenues and earnings per share guidance for 2022.
United Rentals, Inc. (URI - Free Report) reported third-quarter 2022 results, wherein earnings surpassed the Zacks Consensus Estimate but revenues missed the same. The company has been gaining from the sustained demand in its end markets and the strength of its core rental business.
URI also lifted its full-year guidance for total revenues and adjusted EBITDA, given broad-based end-market activity, contractor backlogs, customer sentiment and solid visibility.
Vulcan Materials Company (VMC - Free Report) reported third-quarter 2022 results, wherein earnings and revenues beat the respective Zacks Consensus Estimate. The nation’s largest producer of construction aggregates has been witnessing consistent growth in aggregates unit profitability, solid contributions from acquisitions, and a positive pricing environment, despite ongoing volatility in the macro environment and slowdown in single-family residential demand. However, higher diesel fuel costs and inflationary pressures for many other parts and supplies weighed on the bottom line.
For 2022, VMC now anticipates adjusted EBITDA in the range of $1.64-$1.68 billion versus $1.60-$1.70 billion expected earlier.
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MasTec's (MTZ) Q3 Earnings Beat, Revenues Miss Estimates
MasTec, Inc.’s (MTZ - Free Report) shares gained 4.1% during after-hours trading on Nov 3, after it reported third-quarter 2022 results, wherein earnings beat the Zacks Consensus Estimate, but revenues missed the same.
Elaborating on the performance and looking ahead, Jose Mas, MasTec's CEO, said, “The completion of the IEA acquisition marks an important milestone for MasTec, completing the strategic enhancement of our service capabilities and expertise to support the nation's energy transition to secure sustainable renewable sources. We believe that our expanded service offerings, scale and market leading capacity provide a compelling and complete suite of services to meet expected high customer demand growth for renewable power generation, power grid transmission and distribution and civil infrastructure over the next decade. Additionally, with the continued expected growth in Communications and stronger levels of pipeline services, we believe we have numerous strong long term growth opportunities."
Inside the Headlines
MasTec reported adjusted earnings of $1.34 per share, surpassing the Zacks Consensus Estimate of $1.29. In the year-ago period, the reported adjusted earnings were $1.89 per share. Notably, third-quarter results reflect acquisition integration costs, inflationary pressures, as well as a significant shift in 2022 operations to non-Oil & Gas segments.
Revenues of $2.5 billion missed the consensus mark by 1.2% but increased year over year from $2.4 billion a year ago. This upside was attributable to $600 million increase in non-Oil & Gas segment revenues, partially offset by $500 million decrease in the Oil & Gas segment revenues.
At September 2022-end, the company had an 18-month backlog of $11.2 billion, up 32% year over year.
MasTec, Inc. Price, Consensus and EPS Surprise
MasTec, Inc. price-consensus-eps-surprise-chart | MasTec, Inc. Quote
Segment Update
Revenues from Communications grew 32.6% year over year to $888.9 million. Adjusted EBITDA margin was up 170 basis points (bps) to 12.4%.
Clean Energy and Infrastructure’s revenues increased 8.6% year over year to $563.2 million. Adjusted EBITDA margin was 4.4% versus 2.7% in the year-ago quarter.
Revenues from the Oil and Gas segment dropped 56.2% from the year-ago figure to $375.8 million. Adjusted EBITDA margin declined to 13.4% from 19.9% a year ago.
The Power Delivery (formerly known as Electrical Transmission) segment’s revenues came in at $688.4 million, up 88.4% from $365.3 million in the year-ago quarter. Adjusted EBITDA margin came in at 12.1%, up from 9.5% in the year-ago period.
Operational Update
The company reported an adjusted EBITDA of $245.6 million, down from $284.8 million in the prior-year period. The adjusted EBITDA margin declined to 9.8% from 11.8% in the year-ago quarter.
Financial Details
As of Sep 30, 2022, MasTec had cash and cash equivalents of $95.7 million, down from $360.7 million at 2021-end. Long-term debt (including finance leases) was $2.07 billion, up from $1.88 billion at 2021-end.
In the first nine months of 2022, the company provided $118.7 million cash from operating activities compared with $499.1 million a year ago.
2022 Guidance Updates
The company expects to generate revenues of $9.7 billion for 2022 versus $9.2 billion expected earlier. Adjusted EBITDA is expected to be $780 million versus $750 million of the earlier projection.
Adjusted earnings are anticipated to be $3.02 per share versus the earlier expectation of $3.09 per share. The estimated figure indicates a decrease from $5.58 reported in 2021. The Zacks Consensus Estimate for 2022 earnings is currently pegged at $3.09 per share.
Fourth-Quarter 2022 View
MasTec expects fourth-quarter revenues of $2.9 billion. Adjusted EBITDA is estimated to be $257 million. The adjusted EBITDA margin is expected to be 8.8%. The company expects to report adjusted earnings per share of $1.00 for the quarter. The Zacks Consensus Estimate for fourth-quarter 2022 earnings is currently pegged at $1.08 per share.
Zacks Rank & Peer Releases
MasTec currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
EMCOR Group, Inc. (EME - Free Report) reported third-quarter 2022 results, wherein earnings and revenues surpassed the Zacks Consensus Estimate and increased year over year.
Given the solid momentum of the business activity amid a challenging macroeconomic environment, the company has lifted its revenues and earnings per share guidance for 2022.
United Rentals, Inc. (URI - Free Report) reported third-quarter 2022 results, wherein earnings surpassed the Zacks Consensus Estimate but revenues missed the same. The company has been gaining from the sustained demand in its end markets and the strength of its core rental business.
URI also lifted its full-year guidance for total revenues and adjusted EBITDA, given broad-based end-market activity, contractor backlogs, customer sentiment and solid visibility.
Vulcan Materials Company (VMC - Free Report) reported third-quarter 2022 results, wherein earnings and revenues beat the respective Zacks Consensus Estimate. The nation’s largest producer of construction aggregates has been witnessing consistent growth in aggregates unit profitability, solid contributions from acquisitions, and a positive pricing environment, despite ongoing volatility in the macro environment and slowdown in single-family residential demand. However, higher diesel fuel costs and inflationary pressures for many other parts and supplies weighed on the bottom line.
For 2022, VMC now anticipates adjusted EBITDA in the range of $1.64-$1.68 billion versus $1.60-$1.70 billion expected earlier.