MasTec Inc (MTZ) Reports Q3 2023 Earnings, Updates Full Year Guidance
MasTec Inc (NYSE:MTZ) reported Q3 2023 revenue of $3.26 billion, up from $2.51 billion in Q3 2022.
Net income for the quarter was $14.3 million, a significant decrease from $48.9 million in the same period last year.
The company's Clean Energy and Infrastructure segment faced project start date delays and margin pressures.
MasTec's Oil and Gas segment experienced slower than expected construction of the Mountain Valley Pipeline project.
On November 1, 2023, MasTec Inc (NYSE:MTZ) announced its financial results for the third quarter of 2023. The company reported a revenue of $3.26 billion, a significant increase from $2.51 billion in the same period in 2022. However, net income for the quarter was $14.3 million, down from $48.9 million in Q3 2022.
Performance and Challenges
MasTec's third quarter results were impacted by continued delays on certain Clean Energy and Infrastructure segment project start dates. The company also expects a lower level of this segments activity in the fourth quarter of 2023, further impacted by the recent announcement by Li-Cycle Holdings Corp., indicating a pause in construction on their Rochester Hub project. Despite these challenges, the market and MasTecs visibility on project timing are improving, as evidenced by approximately $500 million of new contract awards in the segment since the end of the third quarter.
Financial Achievements and Outlook
MasTec's Oil and Gas segment had a slower than anticipated ramp in construction of the Mountain Valley Pipeline project. Despite this, the company's full year $2 billion segment revenue outlook remains intact. MasTec now expects to complete the project in the first half of 2024. The company also experienced lower than anticipated revenue in its Communications and Power Delivery segments due to certain customers deferral of previously planned activity. These delays were driven by higher financing costs and annual budgetary limitations.
Income Statement Highlights
For the three months ended September 30, 2023, MasTec reported revenue of $3,257,077,000, a significant increase from $2,513,484,000 in the same period in 2022. The company's net income for the quarter was $14,296,000, a sharp decrease from $48,896,000 in Q3 2022. Earnings per share for the quarter were $0.18, down from $0.66 in the same period last year.
Balance Sheet and Cash Flow Statement Highlights
As of September 30, 2023, MasTec had total assets of $9,529,727,000, up from $9,293,259,000 at the end of 2022. The company's total liabilities were $6,815,006,000, up from $6,552,072,000 at the end of 2022. For the nine months ended September 30, 2023, MasTec reported net cash provided by operating activities of $196,572,000, up from $118,671,000 in the same period in 2022.
Company's Commentary
Jose Mas, MasTecs Chief Executive Officer, commented,
While we are disappointed in our anticipated performance for the second half of 2023, we believe our revised full year guidance fully captures the remaining near-term risks in our business, including the operational challenges IEA has experienced this year. We are keenly focused on providing a clear picture to investors, both near and longer term."
Paul DiMarco, MasTecs Executive Vice President and Chief Financial Officer, noted,
Despite the underperformance in our third quarter, we did make progress in cash flow generation, with $294 million dollars of cash flow from operations in the quarter, resulting in net debt reduction of $213 million. We expect this trend to continue in the fourth quarter with net debt reduction slightly lower than the third quarter."
Explore the complete 8-K earnings release (here) from MasTec Inc for further details.
This article first appeared on GuruFocus.
