MasTec, Inc. (NYSE:MTZ) reported record first-quarter 2017 adjusted earnings per share of 54 cents (excluding one-time items barring non-cash stock compensation expense), a substantial year-over-year improvement over the loss per share of 2 cents in the prior-year quarter. Further, earnings beat the Zacks Consensus Estimate of 47 cents by a comfortable margin of 15% and came ahead of management's guidance of 51 cents per share.
Including one-time items, MasTec reported earnings of 50 cents per share compared with a loss of 3 cents reported in the prior-year quarter.
Operational Update
MasTec’s net sales improved 19% year over year to $1.16 billion in the quarter, outpacing the Zacks Consensus Estimate of $1.06 billion, as well as management’s guidance of $1.05 billion. The better-than-expected performance was particularly led by the Oil and Gas segment which recorded a surge of 56% year over year to $456 million. The Electrical Transmission segment followed with a 14% rise to $98.8 million in revenues. The Communication segment witnessed 90.4% growth in revenues to $560 million. Revenues in the Power Generation and Industrial segment decreased 43% to $46.6 million.
Cost of sales in the quarter advanced 10% year over year to $971 million. Gross profit soared a whopping 108% to $187 million from $89 million in the prior-year quarter. Gross margin expanded 700 basis points to 16.2% in the quarter.
General and administrative expenses increased 8% to $64.8 million. MasTec reported operating profit of $79.4 million in the quarter, a substantial improvement from $9.2 million in the year-earlier quarter. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) were $135 million, compared with $54 million in the year-ago quarter.
MasTec, Inc. Price, Consensus and EPS Surprise
MasTec, Inc. Price, Consensus and EPS Surprise | MasTec, Inc. Quote
Financial Details
MasTec reported cash and cash equivalents of $38.8 million at the end of 2016, up from $5 million as of Dec 31, 2015. The company generated cash flow from operations of $154 million in first-quarter 2017 compared with $15.9 million in the prior-year quarter. Long-term debt was $893 million as of Mar 31, 2017, compared with $961 million as of Dec 31, 2016.
MasTec also reported record 18-month backlog of $5.7 billion as of the first-quarter end, a 5% sequential increase.
Guidance
MasTec hiked annual guidance for fiscal 2017. MasTec now guides adjusted earnings per share of $2.45, a 29% increase over 2016. The company had earlier projected earnings per share of $2.35 for the year. Revenues are now projected at $57 billion, up from the prior guidance of $5.5 billion. Additionally, the company estimates adjusted EBITDA to increase 21% to $575 million, up from the prior expectation of $550 million.
Further, for second-quarter 2017, MasTec guided revenues to be roughly $1.5 billion. The company anticipates adjusted EBITDA of around $150 million and adjusted earnings per share of 65 cents.
Share Price Performance
In the last one year, MasTec has outperformed the Zacks classified Building Products - Heavy Construction sub-industry with respect to price performance. The stock gained around 96.9%, while the industry rose 28.8%.
Zacks Rank & Key Picks
MasTec currently sports a Zacks Rank #3 (Hold).
Some better-ranked stocks in the sector include Louisiana-Pacific Corp. (NYSE:LPX) , Dycom Industries, Inc. (NYSE:DY) and EMCOR Group, Inc. (NYSE:EME) . Louisiana-Pacific Corp has an average positive earnings surprise of 66.28% in the last four quarters and sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Dycom Industries has an average positive earnings surprise of 17.30% in the trailing four quarters while EMCOR has an average earnings surprise of 15.45% in the past four quarters. Both the stocks carry a Zacks Rank #2 (Buy).
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