) reported adjusted earnings from continuing operations at 21
cents per share for the first quarter of 2014, down 27.6% from 29
cents in the year-ago quarter. The results were adversely
affected by a severe winter, which caused disruptions in
business. However, the reported figure surpassed the Zacks
Consensus Estimate of 18 cents per share as well the management's
expected earnings per share of 20 cents.
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Including one-time items, earnings fell 17.4% to 19 cents per
share from 23 cents in the prior-year quarter.
MasTec's net sales increased 5% year on year to $964 million in
the quarter, surpassing the Zacks Consensus Estimate of $921
Sales in the Oil and Gas segment increased 19% year over year to
$379.8 million. Revenues in the Communications segment were up
5.2% to $447 million. However, Electrical Transmission revenues
decreased 5.3% year over year to $80 million. Revenues at the
Power Generation and Industrial segment also declined 39% to
Cost of sales in the quarter went up 6.3% year over year to $841
million. Gross profit declined 3.3% to $122.9 million from the
year-ago quarter. Gross margin contracted 100 basis points to
12.8% in the quarter.
General and administrative expenses increased 9.1% year over year
to $53 million. Operating profit declined 22% to $36 million in
the quarter from $46.5 million in the prior-year quarter.
Consequently, operating margin decreased 130 basis points (bps)
year over year to 3.8%. Adjusted earnings before interest, taxes,
depreciation and amortization (EBITDA) was $75 million as against
$81.4 million in the prior-year quarter.
As of Mar 31, 2014, MasTec reported cash and cash equivalents of
$9 million versus $109 million as of Dec 31, 2013. Cash used in
operating activities was $20.4 million as of Mar 31, 2014,
compared with cash provided by operating activities of $26
million as of Dec 31, 2013. Decreased productivity and delay in
the billing and collection process caused the year-over-year
decline in cash flow.
Long-term debt amounted to $841 million as of Mar 31, 2014,
compared with $765 million as of Dec 31, 2013. The
debt-to-capitalization ratio rose to 44.8% as of Mar 31, 2014,
from 42.8% as of Dec 31, 2013.
Backlog was $4.2 billion at the quarter-end, marking a 22%
increase from the end of the year-ago quarter.
For 2014, MasTec raised its revenue guidance range from
$4.65-$4.7 billion to around $4.7-$4.8 billion. Adjusted EBITDA
was reiterated at $520-$525 million for the full year. The
company also maintained its adjusted earnings guidance of $2.27
to $2.30 per share.
For the second quarter of 2014, the company projects revenues in
the range of around $1.15 billion to $1.20 billion. EBITDA is
estimated to be $124 million while earnings per share from
continuing operations is expected to be around 53 cents.
MasTec is witnessing strong momentum in its end markets. Going
forward, the company expects to benefit from growth
opportunities, which will help to improve its revenues and
margins in wireless, oil and gas pipeline and fiber deployment.
Coral Gables, FL-based MasTec is a leading infrastructure
construction company that operates primarily in North America and
caters to a range of industries. Its services include
engineering, building, installation, maintenance and upgrade of
energy, utility and communications infrastructure as well as
At present, MasTec has a Zacks Rank #3 (Hold). However, some
better-ranked stocks in the same sector include
Orion Marine Group, Inc
Simpson Manufacturing Co., Inc.
EMCOR Group Inc.
). While Orion Marine and Simpson Manufacturing carry a Zacks
Rank #1 (Strong Buy), EMCOR has a Zacks Rank #2 (Buy).