Q2 2013 Earnings Call
August 02, 2013 9:00 am ET
J. Marc Lewis - Vice President of Investor Relations
Jose Ramon Mas - Chief Executive Officer and Director
C. Robert Campbell - Chief Financial Officer, Principal Accounting Officer and Executive Vice President
William D. Bremer - Maxim Group LLC, Research Division
Tahira Afzal - KeyBanc Capital Markets Inc., Research Division
Andrew Kaplowitz - Barclays Capital, Research Division
Noelle C. Dilts - Stifel, Nicolaus & Co., Inc., Research Division
Vishal Shah - Deutsche Bank AG, Research Division
Will Gabrielski - Lazard Capital Markets LLC, Research Division
Liam D. Burke - Janney Montgomery Scott LLC, Research Division
Adam R. Thalhimer - BB&T Capital Markets, Research Division
John B. Rogers - D.A. Davidson & Co., Research Division
Min Cho - FBR Capital Markets & Co., Research Division
Previous Statements by MTZ
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J. Marc Lewis
Thank you, Mary, and good morning, everyone. Welcome to MasTec's second quarter earnings conference call. The following statement is made pursuant to the Safe Harbor for forward-looking statements described in the Private Litigation Reform Act of 1995. In these communications, we may make certain statements that are forward-looking, such as statements regarding MasTec's future results, plans and anticipated trends in the industries where we operate. These forward-looking statements are the company's expectations on the day of the initial broadcast of this conference call, and the company will make no effort to update these expectations based on subsequent events or knowledge. Various risks, uncertainties and assumptions are detailed in our press releases and filings with the SEC. Should one or more of these risks or uncertainties materialize or should any of our underlying assumptions prove incorrect, actual results may differ significantly from results expressed or implied in these communications.
In today's remarks by management, we will be discussing continuing operations adjusted financial metrics as discussed and reconciled in yesterday's press release and supporting schedules. In addition, we may use certain non-GAAP financial measures in this conference call. A reconciliation of any non-GAAP financial measure not reconciled in these comments to the most comparable GAAP financial measure can be found in our earnings release, our 10-K or in the Investors and News sections of our website located at mastec.com.
With us today, we have Jose Mas, our Chief Executive Officer; and Bob Campbell, our Executive Vice President and CFO. The format of the call will be opening remarks and analysis by Jose, followed by a financial review from Bob. These discussions will be followed by a Q&A period, and we expect the call to last about 60 minutes.
We had another great quarter and a lot of good things to talk about today, so I'd like to turn over to Jose. Jose?
Jose Ramon Mas
Thanks, Marc. Good morning, and welcome to MasTec's 2013 second quarter call. Today, I will be reviewing our second quarter results, as well as providing my outlook for the markets we serve. First, some second quarter highlights. Revenue for the quarter was $978 million. Adjusted EBITDA was $110 million, an increase of 31% over the prior year second quarter. Adjusted EBITDA margins were 11.2%, a 280 basis point improvement. Adjusted earnings per share were $0.47, and backlog was up nearly $700 million sequentially on a number of large awards that I'll cover later.
In summary, we had an excellent quarter. Revenue was up double digits across all of our segments, with the exception of our renewable power generation business, which was, as expected, down considerably. Adjusted EBITDA margins were up 280 basis points year-over-year and up 230 basis points sequentially. The improvement in margins were driven by increased profitability in both our pipeline and wireless markets. In spite of our strong financial performance for the quarter, the highlight of the second quarter was the number of large projects we were awarded.
Our pipeline group was awarded an approximately $400 million project from our largest pipeline customer. The project starts in the third quarter and should complete in early 2014.
Our Electrical Transmission group was awarded 2 large projects during the quarter, which totaled over $400 million in value. The first project is from MidAmerican Energy in Iowa called the Multi-Value Projects 3 and 4. These lines cover 191 miles, traversing portions of 9 Iowa counties. The second project was a 112-mile line for Arizona Public Service in Arizona. While only the expected 18-month revenue burn-off is included in backlog, these projects helped drive a nearly $700 million sequential increase to backlog.
As we have previously stated, we are in the midst of enjoying some great opportunities in a number of the markets we serve. We have invested heavily in the equipment and people to execute on those opportunities, and the increase in our backlog is a reflection of the success that we are enjoying.
Now I would like to cover our segment data. Our Communications segment revenue was $497 million for the quarter versus $432 million last year. EBITDA margin for this segment was 12.8% for the second quarter versus 10.9% in last year's second quarter. The growth in this segment was led by our wireless business, which was up 43% year-over-year and up 33% sequentially from the first quarter. Revenue growth in our wireless business has been stronger than expected and has been driven by both growth from AT&T, as well as our ability to diversify our customer base. We expect wireless revenues to exceed $900 million in 2013.