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MasTec (MTZ) Surpasses Q3 Earnings Estimates, Guidance Up
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MasTec, Inc. (MTZ - Free Report) reported mixed results in the third quarter of 2018, with earnings surpassing the Zacks Consensus Estimate and revenues lagging the same.
Adjusted earnings of $1.33 per share trumped the Zacks Consensus Estimate of $1.23 by 8.1%. The bottom line marked an increase of 62.2% from prior-year 82 cents on lower cost of revenues.
Meanwhile, revenues of $1,977.2 million missed the consensus estimate of $1,983 million by 0.3%. However, revenues increased 1.1% year over year, primarily on an uptick in majority of the segments.
Despite facing regulatory and hurricane flooding disruptions, the company witnessed a strong third quarter. Moreover, the company raised its outlook on robust backlog level across multiple segments. Meanwhile, shares of MasTec jumped 3.7% following the results on Nov 1.
Operational Update
Cost of revenues in the quarter declined 2.6% year over year to $1.68 billion. However, general and administrative expenses rose 21% to $80.3 million.
Adjusted EBITDA was $226.3 million in the reported quarter compared with $179.6 million in the prior-year quarter. Adjusted EBITDA margin increased 220 basis points (bps) year over year but fell 40 bps sequentially to 11.4% from the year-ago quarter.
The company’s backlog as of Sep 30, 2018, was $7.8 billion, up by $114 million sequentially and $2.8 billion from the year-ago quarter.
Segment Update
The Power Generation and Industrial’s revenues surged 85% year over year to $179.6 million. However, adjusted EBITDA margin dropped 420 bps to 5.4% from the prior-year quarter.
Revenues at Communications grew 8.4% to $661.7 million year over year. Adjusted EBITDA margin increased 60 bps to 11.3%.
However, revenues at the Oil and Gas segment dropped 10.8% year over year to $1,035.9 million. Adjusted EBITDA margin increased 570 bps to 15%.
Electrical Transmission segment recorded a 21% increase in revenues to $99.1 million in the reported quarter. Adjusted EBITDA margin declined 240 bps to 3.1%.
Financial Details
MasTec reported cash and cash equivalents of $68.5 million at the end of the third quarter compared with $43.8 million at the end of the prior-year quarter. The company received around $700 million in cash flows at third-quarter end for the completion of Oil & Gas pipeline construction project.
Net cash flow provided by operations was $26.8 million as of Sep 30, 2018, compared with $166.5 million recorded at the end of the year ago quarter.
Long-term debt was $1.7 billion as of Sep 30, 2018, compared with $1.3 million as of Dec 31, 2017.
Moreover, the company repurchased 1.6 million shares in the third quarter along with approval of an additional $150 million share repurchase.
Guidance
For 2018, the company retained its revenue guidance of $6.9 billion.
Coming to non-GAAP measures, adjusted EBITDA is expected at $719 million or 10.4% of the revenues compared with $708 million or 10.3% of revenues expected earlier. Adjusted earnings are expected at $3.76 versus the prior expectation of $3.67.
For the fourth quarter of 2018, the company expects revenues of roughly $1.9 billion. Adjusted EBITDA is expected at $194 million, with adjusted earnings projected around $1.05.
The company expect 2018 cash flow from operations to exceed $550 million. Moreover, debt is expected in the range of $1.1-$1.2 billion, down from $1.7 billion as of Sep 30, 2018.
Dycom Industries reported better-than-expected earnings in two of the trailing four quarters, the average beat being 3.4%
EMCOR is expected to see earnings growth of 19.9% this year.
North American Construction expects 2018 earnings growth of 235.7%.
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MasTec (MTZ) Surpasses Q3 Earnings Estimates, Guidance Up
MasTec, Inc. (MTZ - Free Report) reported mixed results in the third quarter of 2018, with earnings surpassing the Zacks Consensus Estimate and revenues lagging the same.
Adjusted earnings of $1.33 per share trumped the Zacks Consensus Estimate of $1.23 by 8.1%. The bottom line marked an increase of 62.2% from prior-year 82 cents on lower cost of revenues.
Meanwhile, revenues of $1,977.2 million missed the consensus estimate of $1,983 million by 0.3%. However, revenues increased 1.1% year over year, primarily on an uptick in majority of the segments.
Despite facing regulatory and hurricane flooding disruptions, the company witnessed a strong third quarter. Moreover, the company raised its outlook on robust backlog level across multiple segments. Meanwhile, shares of MasTec jumped 3.7% following the results on Nov 1.
Operational Update
Cost of revenues in the quarter declined 2.6% year over year to $1.68 billion. However, general and administrative expenses rose 21% to $80.3 million.
Adjusted EBITDA was $226.3 million in the reported quarter compared with $179.6 million in the prior-year quarter. Adjusted EBITDA margin increased 220 basis points (bps) year over year but fell 40 bps sequentially to 11.4% from the year-ago quarter.
MasTec, Inc. Price, Consensus and EPS Surprise
MasTec, Inc. Price, Consensus and EPS Surprise | MasTec, Inc. Quote
Backlog Details
The company’s backlog as of Sep 30, 2018, was $7.8 billion, up by $114 million sequentially and $2.8 billion from the year-ago quarter.
Segment Update
The Power Generation and Industrial’s revenues surged 85% year over year to $179.6 million. However, adjusted EBITDA margin dropped 420 bps to 5.4% from the prior-year quarter.
Revenues at Communications grew 8.4% to $661.7 million year over year. Adjusted EBITDA margin increased 60 bps to 11.3%.
However, revenues at the Oil and Gas segment dropped 10.8% year over year to $1,035.9 million. Adjusted EBITDA margin increased 570 bps to 15%.
Electrical Transmission segment recorded a 21% increase in revenues to $99.1 million in the reported quarter. Adjusted EBITDA margin declined 240 bps to 3.1%.
Financial Details
MasTec reported cash and cash equivalents of $68.5 million at the end of the third quarter compared with $43.8 million at the end of the prior-year quarter. The company received around $700 million in cash flows at third-quarter end for the completion of Oil & Gas pipeline construction project.
Net cash flow provided by operations was $26.8 million as of Sep 30, 2018, compared with $166.5 million recorded at the end of the year ago quarter.
Long-term debt was $1.7 billion as of Sep 30, 2018, compared with $1.3 million as of Dec 31, 2017.
Moreover, the company repurchased 1.6 million shares in the third quarter along with approval of an additional $150 million share repurchase.
Guidance
For 2018, the company retained its revenue guidance of $6.9 billion.
Coming to non-GAAP measures, adjusted EBITDA is expected at $719 million or 10.4% of the revenues compared with $708 million or 10.3% of revenues expected earlier. Adjusted earnings are expected at $3.76 versus the prior expectation of $3.67.
For the fourth quarter of 2018, the company expects revenues of roughly $1.9 billion. Adjusted EBITDA is expected at $194 million, with adjusted earnings projected around $1.05.
The company expect 2018 cash flow from operations to exceed $550 million. Moreover, debt is expected in the range of $1.1-$1.2 billion, down from $1.7 billion as of Sep 30, 2018.
Zacks Rank & Key Picks
MasTec currently carries a Zacks Rank #2 (Buy).
A few other top-ranked stocks in the Building Products – Heavy construction industry are Dycom Industries, Inc. (DY - Free Report) , EMCOR Group, Inc. (EME - Free Report) and North American Construction Group Ltd. (NOA - Free Report) , each carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Dycom Industries reported better-than-expected earnings in two of the trailing four quarters, the average beat being 3.4%
EMCOR is expected to see earnings growth of 19.9% this year.
North American Construction expects 2018 earnings growth of 235.7%.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6% and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>