MasTec, Inc. (MTZ - Free Report) reported third-quarter 2016 adjusted earnings per share of 78 cents (excluding one-time items barring non-cash stock compensation expense), a substantial improvement of 225% from the prior-year quarter’s adjusted earnings of 24 cents. Further, earnings beat the Zacks Consensus Estimate of 67 cents by a comfortable margin of 14% and came ahead of management's guidance of 69 cents per share. The better-than-expected earnings in the quarter was primarily driven by strength in the company’s Oil & Gas segment.
Including one-time items, MasTec reported earnings of 69 cents per share compared with 9 cents reported in the prior-year quarter.
MasTec’s net sales improved 43% year over year to $1586 million in the quarter, coming ahead of the Zacks Consensus Estimate of $1496 million as well as management’s guidance of $1.5 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 81% year over year to $736 million. The Electrical Transmission segment followed with a 34% rise to $101.7 million in revenues. The Communication segment witnessed 34% growth in revenues to $624.3 million while revenues in Power Generation and Industrial segment increased 7% to $123.6 million.
Cost of sales in the quarter advanced 41% year over year to $1,369 million. Gross profit improved 57% to $217.2 million from $138 million in the year-ago quarter. Gross margin expanded 130 basis points to 13.7% in the quarter.
General and administrative expenses increased 5% to $67 million. MasTec reported operating profit of $107.5 million in the quarter, a 233% jump from $32.3 million in the prior-year quarter. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) were $165 million, compared with $91 million in the prior-year quarter.
MasTec ended the third quarter with cash and cash equivalents of $9.4 million, up from $7.1 million at the end of the prior-year quarter. The company generated cash flow from operations of $127 million in the nine month period ended Sept 30, 2016, compared with $260 million in the prior-year quarter. Long-term debt was $951 million as of Sep 30, 2016, compared with $933 million as of Dec 31, 2015. MasTec’s board has authorized the repurchase of up to $100 million worth of shares.
MASTEC INC Price, Consensus and EPS Surprise