On Apr 11, 2014, we initiated coverage on leading
infrastructure construction company,
). MasTec reported upbeat fourth-quarter results along with
record revenues, earnings per share and EBITDA for 2013,
outperforming the prior 4 consecutive years of record
performances on Feb 28.
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Adjusted earnings per share increased 13% to 53 cents in the
fourth quarter and advanced 25% to a record $1.90 for 2013.
MasTec's net sales increased 24% year over year to $1.16 billion
in the quarter. In 2013, revenues increased 16% year over year to
$4.32 billion, helped by strong revenue growth across most
For 2014, MasTec expects revenues to be around $4.65 billion to
$4.7 billion and adjusted EBITDA between $520 and $525 million.
The company now expects adjusted earnings per share to be in the
range of $2.27 to $2.30. The guidance, when compared with 2013,
reflects the negative impact of foreign currency translations
related to its Canadian operations.
The company's end markets offer compelling growth opportunities.
The Communications segment has immense potential for progress
given the continued developments in wireless technology. Wireless
and fiber optic communication network upgrades will continue to
increase in 2014. The segment is poised to benefit from
incremental opportunities and contract awards from
). Wireline also has the potential to drive growth on the back of
large data demand and the subsequent need for continued broadband
expansion. The recent announcement from multiple carriers about 1
gigabit speeds to residential customers will require a
significant fiber expansion opening up a sizable opportunity for
The Power Generation segment will profit from the increasing
demand for more domestic, environmentally sensitive electrical
power production, such as wind and solar collection farms will
support. MasTec booked $200 million in wind work in the quarter
and since the end of the year, the company either signed or was
verbally awarded an additional $200 million in new awards, some
of which go into 2015. The company expects a significant
improvement in the wind market in 2014. The Electrical
transmission segment will gain support from the maintenance,
upgrade and expansion of the nation's electrical grid.
In the second quarter, MasTec acquired Calgary, Alberta-based oil
and gas pipeline and facility construction services company, Big
Country Energy Services, and its affiliated operating companies
operating together in North America. The acquisition will enhance
MasTec's ability to take advantage of the rapidly increasing
opportunities anticipated for pipeline energy infrastructure work
in North America.
Other Stocks to Consider
MasTec currently carries a Zacks Rank #1 (Strong Buy). Another
stock in the same sector that warrants a look is
India Globalization Capital, Inc.
) with a Zacks Rank #2 (Buy).