MasTec Up on Q4 Earnings, Record 2013 - Analyst Blog


Shares of MasTec, Inc. ( MTZ ) hit a 52-week high of $41.67 on Friday, Feb 28, as the company reported upbeat fourth-quarter results and record revenues, earnings per share and earnings before interest, tax, depreciation and amortization (EBITDA) for 2013, outperforming the prior 4 consecutive years of record performances.

Adjusted earnings from continuing operations increased 13% to 53 cents per share in the fourth quarter of 2013 from 47 cents a share in the year-ago quarter, ahead of the Zacks Consensus Estimate of 48 cents. Including one-time items, earnings grew 9% to 50 cents per share from the prior-year quarter's earnings of 46 cents.

For 2013, the company's adjusted earnings from continuing operations increased 25% year over year to a record $1.90, well ahead of the Zacks Consensus Estimate of $1.79. Including one-time items, earnings increased 23% to $1.74.

Operational Update

In 2013, revenues increased 16% year over year to $4.32 billion, surpassing the Zacks Consensus Estimate of $4.25 billion. Strong revenue growth across most segments drove the performance. MasTec's net sales increased 24% year on year to $1.16 billion in the quarter, surpassing the Zacks Consensus Estimate of $1086 million.

Oil and Gas sales outperformed the other segments with a rise of 103% to $494 million. Revenues in the Electrical Transmission segment increased 27% year over year to $107 million. Communications revenues were up 8% to $498 million. However, revenues at the Power Generation and Industrial segment declined 59% to $57.1 million.

Cost of sales in the quarter went up 24% to $987 million in the reported quarter. Gross profit improved 24% to $172 million from the year-ago quarter. Gross margin remained flat at 14.8% in the quarter.

General and administrative expenses increased 41% to $55.6 million in the quarter. Operating profit improved 9% to $78.6 million in the quarter from $72 million in the prior-year quarter. Consequently, operating margin expanded 90 basis points (bps) year over year to 6.8%.

Adjusted EBITDA was $123 million in the reported quarter compared with $100 million in the prior-year quarter. In 2013, EBITDA was a record $449 million, up from $336 million in 2012.

Financial Details

Cash and cash equivalents were $23 million as of 2013 end compared with $27 million as of 2012 end. Cash flow from operating activities was $200 million in 2013 compared with $173 million in the prior year. Long-term debt amounted to $765 million as of Dec 31, 2013, compared with $546 million as of Dec 31, 2012. The debt-to-capitalization ratio expanded to 42.8% as of Dec 31, 2013, from 38.8% as of Dec 31, 2012.

Backlog was $4.1 billion at the end of the year, a 23% increase from last year.


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 reflects the negative impact of foreign currency translations related to its Canadian operations compared with 2013.

For the first quarter of 2014, the company projected about $920 million of revenues, EBITDA is estimated to be $74 million and diluted earnings per share from continuing operations is expected to be around 20 cents. The first quarter is normally the weakest period seasonally and the estimated financial guidance reflects the impact of severe weather disruptions in the beginning of this year.

The company is witnessing strong momentum in its end markets. MasTec will benefit from growth opportunities for improvement in revenues and margins in wireless, oil and gas pipeline, electrical transmission, fiber deployment and renewable power markets.

Coral Gables, Fla.-based MasTec is a leading infrastructure construction company operating mainly throughout North America across a range of industries. Its activities include engineering, building, installation, maintenance and upgrade of energy, utility and communications infrastructure and industrial infrastructure.

MasTec holds a Zacks Rank #3 (Hold).

Peer Performance

MasTec's peer, Granite Construction Incorporated ( GVA ), reported adjusted fourth-quarter 2013 earnings of 2 cents per share and a loss per share of 17 cents for full-year 2013. Both the results outperformed the Zacks Consensus Estimate of a loss per share of 3 cents in the fourth quarter and a loss per share of 24 cents for full-year 2013.

Great Lakes Dredge & Dock Corporation 's ( GLDD ) 2013 earnings per share of 33 cents, increased three fold from the year-ago earnings of 11 cents, in line with the Zacks Consensus Estimate. The dredging services provider reported earnings per share of 8 cents in the fourth quarter, down 11% from 9 cents in the year-ago quarter, but ahead of the Zacks Consensus Estimate of 6 cents per share.

Chicago Bridge & Iron Company N.V . ( CBI ) posted fourth-quarter adjusted earnings of $1.91 per share (excluding the one-time items), well exceeding the Zacks Consensus Estimate of $1.17 per share and its year-ago quarter's earnings of 95 cents. For 2013, the company reported adjusted earnings of $4.91 per share, which surpassed the Zacks Consensus Estimate of $4.15 per share, up 56% year over year.

CHICAGO BRIDGE (CBI): Free Stock Analysis Report

GREAT LAKES DRG (GLDD): Free Stock Analysis Report

GRANITE CONSTRU (GVA): Free Stock Analysis Report

MASTEC INC (MTZ): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Business , Earnings , Stocks

Referenced Stocks: CBI , GLDD , GVA , MTZ

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