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MasTec, Inc. (MTZ - Free Report) reported weak results for third-quarter 2023, wherein earnings and revenues missed the Zacks Consensus Estimate. Earnings declined but revenues increased on a year-over-year basis. The quarterly results were impacted by continued delays on certain Clean Energy and Infrastructure segment project start dates as well as lower-than-expected revenues from the Communications and Power Delivery segments. Also, higher costs added to the woes.
Given the above-mentioned headwinds, the company has also lowered its expectations for 2023.
MasTec’s shares lost 12.3% in the after-hours trading session on Oct 31.
Adjusted earnings per share (EPS) of 95 cents per share missed the Zacks Consensus Estimate of $1.92 by 50.5%. The bottom line declined 29.1% from the $1.34 reported in the year-ago period. The reported number came below MTZ’s expectation of $1.85-$2.13.
Revenues of $3.26 billion missed the consensus mark of $3.83 billion by 15%. Nonetheless, the top line jumped 29.6% from $2.51 billion a year ago.
At September-end, it had an 18-month backlog of $12.49 billion, up 11.2% from $11.23 billion a year ago. The metric, however, slipped 7.1% from $13.44 billion sequentially.
Segment Update
Revenues from Communications slipped 7.3% year over year to $824.4 million, much lower than our projection of $876.7 million. Adjusted EBITDA margin contracted 290 bps to 9.5%.
Clean Energy and Infrastructure’s revenues skyrocketed 95.3% year over year to $1,099.9 million. Our model had predicted segment revenues of $1,321.2 million for the quarter. Adjusted EBITDA margin was 5.2%, up from 4.4% in the year-ago quarter.
Revenues from the Oil and Gas segment grew 78.9% from the year-ago figure of $672.3 million, higher than our expectation of $661.9 million. Adjusted EBITDA margin improved to 14.5% from 13.4% a year ago.
The Power Delivery (formerly known as Electrical Transmission) segment’s revenues totaled $665 million, down 3.4% from the year-ago quarter. This is lower than our projection of $801.5 million. Adjusted EBITDA margin came in at 8.6%, down 350 bps from the year-ago period.
Operational Update
MasTec reported adjusted EBITDA of $271.1 million, up 10.4% from $245.6 million in the prior-year period. Adjusted EBITDA margin declined to 8.3% from 9.8% in the year-ago quarter.
Financial Details
As of Sep 30, 2023, MasTec had approximately $1.16 billion in liquidity, including cash and cash equivalents of $214.2 million. At the end of 2022, it had cash and cash equivalents of $370.6 million. Long-term debt (including finance leases) was $3.03 billion, slightly down from $3.05 billion at 2022-end.
In the first nine months of 2023, net cash provided by operating activities was $196.6 million, up from $118.7 million a year ago.
Q4 View
Adjusted EBITDA is estimated to be $221 million, implying a decline from $257.9 million a year ago.
Adjusted EBITDA margin is projected to be 6.7%. The metric was 8.6% in the prior year.
The company estimates adjusted EPS to be 44 cents for fourth-quarter 2023, suggesting a decline from the previous year’s figure of $1.03.
2023 Guidance Trimmed
Adjusted EBITDA is now anticipated to be $850 million (prior projection: $1.05-$1.10 billion).
Adjusted EBITDA margin is now projected to be 7.1%, indicating a decline from 8% a year ago. MTZ earlier suggested the metric to be 8.2-8.5%.
Adjusted EPS is now anticipated to be $1.75, down from the previous expectation of $3.75-$4.19. In 2022, MTZ reported adjusted EPS of $3.05.
Vulcan Materials Company (VMC - Free Report) reported stellar results for the third quarter of 2023, surpassing the Zacks Consensus Estimate for both earnings and revenues.
VMC’s adjusted EPS of $2.29 increased 28.7% from the year-ago level of $1.78. Total revenues of $2,185.8 million increased 4.7% year over year.
Otis Worldwide Corporation (OTIS - Free Report) reported impressive results in third-quarter 2023. Its earnings and net sales surpassed the Zacks Consensus Estimate and rose on a year-over-year basis. Its quarterly results reflected 12 consecutive quarters of organic sales growth and solid operating margin expansion, contributing to high-teens adjusted EPS growth.
OTIS reported quarterly EPS of 95 cents, increasing 18.8% from the year-ago quarter’s figure of 80 cents. Net sales of $3.52 billion rose 5.4% on a year-over-year basis.
United Rentals, Inc.’s (URI - Free Report) third-quarter 2023 earnings and revenues surpassed the Zacks Consensus Estimate. On a year-over-year basis, earnings and revenues increased courtesy of sustained growth across the business, profitability and returns, underpinned by broad-based activity.
URI’s adjusted EPS of $11.73 increased 26.5% from the prior-year figure of $9.27. Total revenues of $3.77 billion grew 23.4% year over year.
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MasTec (MTZ) Misses on Q3 Earnings & Revenues, Trims '23 View
MasTec, Inc. (MTZ - Free Report) reported weak results for third-quarter 2023, wherein earnings and revenues missed the Zacks Consensus Estimate. Earnings declined but revenues increased on a year-over-year basis. The quarterly results were impacted by continued delays on certain Clean Energy and Infrastructure segment project start dates as well as lower-than-expected revenues from the Communications and Power Delivery segments. Also, higher costs added to the woes.
Given the above-mentioned headwinds, the company has also lowered its expectations for 2023.
MasTec’s shares lost 12.3% in the after-hours trading session on Oct 31.
MasTec, Inc. Price, Consensus and EPS Surprise
MasTec, Inc. price-consensus-eps-surprise-chart | MasTec, Inc. Quote
Inside the Headlines
Adjusted earnings per share (EPS) of 95 cents per share missed the Zacks Consensus Estimate of $1.92 by 50.5%. The bottom line declined 29.1% from the $1.34 reported in the year-ago period. The reported number came below MTZ’s expectation of $1.85-$2.13.
Revenues of $3.26 billion missed the consensus mark of $3.83 billion by 15%. Nonetheless, the top line jumped 29.6% from $2.51 billion a year ago.
At September-end, it had an 18-month backlog of $12.49 billion, up 11.2% from $11.23 billion a year ago. The metric, however, slipped 7.1% from $13.44 billion sequentially.
Segment Update
Revenues from Communications slipped 7.3% year over year to $824.4 million, much lower than our projection of $876.7 million. Adjusted EBITDA margin contracted 290 bps to 9.5%.
Clean Energy and Infrastructure’s revenues skyrocketed 95.3% year over year to $1,099.9 million. Our model had predicted segment revenues of $1,321.2 million for the quarter. Adjusted EBITDA margin was 5.2%, up from 4.4% in the year-ago quarter.
Revenues from the Oil and Gas segment grew 78.9% from the year-ago figure of $672.3 million, higher than our expectation of $661.9 million. Adjusted EBITDA margin improved to 14.5% from 13.4% a year ago.
The Power Delivery (formerly known as Electrical Transmission) segment’s revenues totaled $665 million, down 3.4% from the year-ago quarter. This is lower than our projection of $801.5 million. Adjusted EBITDA margin came in at 8.6%, down 350 bps from the year-ago period.
Operational Update
MasTec reported adjusted EBITDA of $271.1 million, up 10.4% from $245.6 million in the prior-year period. Adjusted EBITDA margin declined to 8.3% from 9.8% in the year-ago quarter.
Financial Details
As of Sep 30, 2023, MasTec had approximately $1.16 billion in liquidity, including cash and cash equivalents of $214.2 million. At the end of 2022, it had cash and cash equivalents of $370.6 million. Long-term debt (including finance leases) was $3.03 billion, slightly down from $3.05 billion at 2022-end.
In the first nine months of 2023, net cash provided by operating activities was $196.6 million, up from $118.7 million a year ago.
Q4 View
Adjusted EBITDA is estimated to be $221 million, implying a decline from $257.9 million a year ago.
Adjusted EBITDA margin is projected to be 6.7%. The metric was 8.6% in the prior year.
The company estimates adjusted EPS to be 44 cents for fourth-quarter 2023, suggesting a decline from the previous year’s figure of $1.03.
2023 Guidance Trimmed
Adjusted EBITDA is now anticipated to be $850 million (prior projection: $1.05-$1.10 billion).
Adjusted EBITDA margin is now projected to be 7.1%, indicating a decline from 8% a year ago. MTZ earlier suggested the metric to be 8.2-8.5%.
Adjusted EPS is now anticipated to be $1.75, down from the previous expectation of $3.75-$4.19. In 2022, MTZ reported adjusted EPS of $3.05.
Zacks Rank & Peer Releases
MasTec currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Vulcan Materials Company (VMC - Free Report) reported stellar results for the third quarter of 2023, surpassing the Zacks Consensus Estimate for both earnings and revenues.
VMC’s adjusted EPS of $2.29 increased 28.7% from the year-ago level of $1.78. Total revenues of $2,185.8 million increased 4.7% year over year.
Otis Worldwide Corporation (OTIS - Free Report) reported impressive results in third-quarter 2023. Its earnings and net sales surpassed the Zacks Consensus Estimate and rose on a year-over-year basis. Its quarterly results reflected 12 consecutive quarters of organic sales growth and solid operating margin expansion, contributing to high-teens adjusted EPS growth.
OTIS reported quarterly EPS of 95 cents, increasing 18.8% from the year-ago quarter’s figure of 80 cents. Net sales of $3.52 billion rose 5.4% on a year-over-year basis.
United Rentals, Inc.’s (URI - Free Report) third-quarter 2023 earnings and revenues surpassed the Zacks Consensus Estimate. On a year-over-year basis, earnings and revenues increased courtesy of sustained growth across the business, profitability and returns, underpinned by broad-based activity.
URI’s adjusted EPS of $11.73 increased 26.5% from the prior-year figure of $9.27. Total revenues of $3.77 billion grew 23.4% year over year.