) adjusted earnings increased an impressive 93% to 27 cents per
share in the first quarter of 2013 from the adjusted earnings of
14 cents a share in the year-ago quarter. The results were ahead
of the Zacks Consensus Estimate of 24 cents. It was also better
than expected from management's previous guidance of 24 cents a
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Earnings in the reported quarter exclude an after tax loss on
debt extinguishment of 4 cents per share. Including this,
earnings grew 64% to 23 cents per share from the prior-year
quarter's earnings of 14 cents.
MasTec posted record net sales of $919 million in the first
quarter, increasing 24% year over year, beating the Zacks
Consensus Estimate of $841 million. Revenues exceeded the
company's prior guidance of $850 million. The organic revenue
growth rate was 19% in the reported quarter, driven by the growth
in oil and gas pipeline and facilities, electrical transmission
and wireless construction.
Cost of sales went up 21% to $791.5 million in the reported
quarter. Gross profit improved 47.8% to $127 million from the
year-ago quarter. Gross margin expanded 210 basis points (bps)
year over year to 13.8% in the quarter.
General and administrative expenses increased 31% to $48.8
million in the quarter. Operating profit improved 66% to $46.5
million in the quarter from $28 million in the prior-year
quarter. Consequently, operating margin expanded 120 bps year
over year to 5%.
Cash and cash equivalents were $109 million as of Mar 31, 2013
compared with $15.8 million as of Mar 31, 2012. Cash flow from
operating activities was $31.8 million in the reported quarter
compared with $43.4 million in the prior-year quarter. Long-term
debt amounted to $685.4 million as of Mar 31, 2013, compared with
$546.3 million as of Dec 31, 2012. The debt-to-capitalization
ratio expanded to 43.6% as of Mar 31, 2013 from 38.8% as of Dec
For the full year 2013, MasTec expects revenue to be at the upper
end of the prior range, at $4.0 billion. MasTec however, raised
the projection for continuing operation's adjusted EBITDA to $425
million from the previous band of $410 million to $420 million.
MasTec now expects adjusted diluted earnings per share estimate
of $1.80 which includes 4 cents to 5 cents per share of
additional interest costs related to the recently upsized senior
For the second-quarter 2013, the company projected about $950
million of revenue, continuing operations EBITDA is estimated to
be $103 million and diluted earnings per share from continuing
operations is expected to be around 42 cents. MasTec believes
that its capital structure would continue to improve and expects
to have adequate capital to take full advantage of various growth
Coral Gables, FL-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
MasTec currently retains a short-term Zacks Rank #4 (Sell). Other
companies in the building and heavy construction industry with
favorable Zacks Ranks are
China Communications Construction Company
Orion Marine Group, Inc
Zhejiang Expressway Co. Ltd.
). While China Communications Construction holds a Zacks Rank #1
(Strong Buy), Orion Marine and Zhejiang Expressway carry a Zacks
Rank #2 (Buy).