Q1 2011 Earnings Call
May 05, 2011 9:00 am ET
J. Lewis - Vice President of Investor Relations
Jose Mas - Chief Executive Officer and Director
C. Campbell - Chief Financial Officer, Principal Accounting Officer and Executive Vice President
Noelle Dilts - Stifel, Nicolaus & Co., Inc.
Alexander Rygiel - FBR Capital Markets & Co.
Veny Aleksandrov - Pritchard Capital Partners, LLC
Tahira Afzal - KeyBanc Capital Markets Inc.
Adam Thalhimer - BB&T Capital Markets
John Rogers - D.A. Davidson & Co.
William Bremer - Maxim Group LLC
Andy Kaplowitz - Barclays Capital
Liam Burke - Janney Montgomery Scott LLC
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Thanks, Laura. Good morning, everyone, and welcome to MasTec's First Quarter Earnings Conference Call.
The following statement is made pursuant to the Safe Harbor for forward-looking statements described in the Private Securities 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 Securities and Exchange Commission. 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 addition, we may make certain non-GAAP financial measures in this conference call. A reconciliation of any non-GAAP financial measures not reconciled in these comments to the most comparable GAAP financial measure can be found in our earnings release from yesterday or on the Investors page 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 Chief Financial Officer. The format of the call will be opening remarks and announces 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 for about 60 minutes. Once again, we had a great quarter so we have a lot of good things to talk about today. So I'll now turn the call over to Jose so we can get started. Jose?
Thank you, Marc. Good morning, and welcome to MasTec's 2011 First Quarter Call. Today, I will be reviewing our first quarter results, as well as providing my outlook for the markets we serve. First, some first quarter highlights.
Revenue for the quarter was $618 million, a 37% increase over the prior year's quarter. It's important to note that all of this growth was organic. EBITDA was $58 million, a 69% increase over the prior year's quarter. Earnings per share was $0.26 versus $0.10 in last year's first quarter, a 160% increase. Gross margins increased to 14 1/2%, a 90 basis point improvement over the prior year's quarter. And cash flow from operations increased 45% to $50 million.
We had a very strong first quarter and an excellent start to the year. We performed better than expected, with broad-based revenue growth and margin improvement. We experienced strong double-digit growth in our Install to the Home, Wireless, Legacy Transmission and Pipeline business. More importantly, we continue to perform at a high level despite a challenging environment. We believe our diversified business model is the key differentiator for MasTec and one that has helped drive our success.
Today, we serve numerous markets and industries that we feel have very strong long term fundamentals, with significant opportunities for expansion and growth. We strongly believe that our exposure to oil and natural gas pipeline, high-voltage electrical transmission, wireless infrastructure construction and maintenance and industrial and renewable construction will continue to be excellent sources of growth and opportunity for MasTec for years to come. Now I would like to cover some industry specifics.
Our communications revenues grew 54% over last year's first quarter to $346 million. This increase was driven by double-digit growth in all of our communications markets, including Wireless, Wireline and Install to the Home. In our Install to the Home business, revenue from DIRECTV was up 21% for the quarter. This was better than we expected. On our last call, I stated that we expected this customer to grow at a single-digit rate for 2011. While still early, we now believe growth will be a little stronger than expected in this business this year.
Our Wireline business experienced growth for the second consecutive quarter. Growth in this market is being driven by broadband stimulus funded projects. We have now been awarded close to $100 million of broadband stimulus projects and the pipeline of future project remains very strong. We continue to believe this will be a source of growth for the next few years.
Shifting to Wireless, the first quarter was very strong, with revenues more than doubling that of last year's first quarter. We got off to a very quick start, helped by carry over work from 2010 and have a very large build plan for 2011. We expect a very strong year.