MasTec, Inc. (MTZ): New Analyst Report from Zacks Equity Research - Zacks Equity Research Report
MasTec's adjusted earnings declined 10% year over year to $0.53 per share in third-quarter 2014. For 2014, MasTec projects earnings of around $1.55 per share. The company expects adjusted earnings per share to be around $1.87 for the year, reflecting the potential impact of the slump in global oil prices and expected lower levels of wireless project activity. Unexpected delays in wireless project spending as well as the effect of low oil prices on the Oil and Gas segment will remain headwinds in the near future. Moreover, enhanced debt following acquisitions and concentration of business among few customers remain concerns. Thus we maintain our Underperform recommendation on MasTec with a target price of $17.
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 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 in the third quarter as a percentage of revenue were - AT&T (16%), DIRECTV (12%), Enbridge (10%), Berkshire Hathaway Energy (8%) and Canadian Natural Resources (4%). Duke Energy, Plains All American Pipeline, CenturyLink and Chesapeake Midstream Partners 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 (39% of third 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 (42%): The segment performs engineering, construction and maintenance services on oil and natural gas pipelines and processing facilities for the energy and utilities industries.
Electrical Transmission (10%): The segment primarily serves the energy and utility industries through the engineering, construction and maintenance of electrical transmission lines and substations.
Power Generation and Industrial (9%): 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 infrastructure.
Other: It primarily includes small business units that perform construction services for a variety of end markets in Mexico and elsewhere internationally.
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