MasTec's second-quarter 2014 adjusted earnings per share decreased
18% to $0.45 due to slowdown in revenue growth of wireless
projects. For the third quarter, MasTec expects revenue of
approximately $1.30 $1.35 billion and adjusted earnings per share
of $0.56. For 2014, MasTec expects revenue of $4.4 to $4.5 billion
and adjusted earnings within $1.55 to $1.58 per share. MasTec's
guidance reflects reduced levels of expected wireless project
revenue in the second half of 2014, compared with the prior year.
The company however anticipates returning to a more normalized
level of wireless project revenue in 2015. We have maintained our
Underperform recommendation on MasTec with a target price of $26.
MasTec, Inc. (MTZ) is a leading infrastructure construction
company operating throughout the United States. The company engages
in the building, installation, maintenance and upgrade of energy,
communication and utility infrastructure. MasTec has been in
operation for more than 80 years and currently has 380 locations
with 13,450 employees.
MasTec caters to a wide range of industrial customers: utilities
(including wind farms, solar farms and other renewable energy,
natural gas gathering systems and pipeline infrastructure),
communications (including wired and wireless telephony and
satellite television) and government (including water, sewer and
other utility and communications work on military bases.
MasTec's top 10 customers for the first quarter as a percentage
of revenue were - AT&T (22%) Enbridge (14%) DIRECTV (14%), Duke
Energy (5%), Energy Transfer Company (5%), MidAmerican Energy (4%),
and ATCO Group, BHP Billiton, Starwood Energy and Talisman Energy
each contributed 2% to the total revenue. MasTec reports its
results under five segments focused on broad end-user markets
Communications, Oil and Gas, Electrical Transmission, Power
Generation and Industrial and Other.
Communications (46% of first quarter 2014 revenues): The segment
performs engineering, construction and maintenance of
communications infrastructure mainly related to wireless and
wireline communications and install-to-the-home.
Oil and Gas (40%): The segment performs engineering,
construction and maintenance services on oil and natural gas
pipelines and processing facilities for the energy and utilities
Electrical Transmission (8%): The segment primarily serves the
energy and utility industries through the engineering, construction
and maintenance of electrical transmission lines and
Power Generation and Industrial (6%): The segment primarily
serves the energy and utility end-markets and other end-markets
through the installation and construction of conventional and
renewable power plants, related electrical transmission
infrastructure, ethanol facilities and various types of industrial
Other: It primarily includes small business units that perform
construction services for a variety of end markets in Mexico and
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