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MasTec (MTZ) Incurs Q1 Loss, Beats on Revenues, Lowers View

MasTec, Inc.’s MTZ shares dipped 4.8% during after-hours trading on May 5, after it reported first-quarter 2022 results, wherein earnings and revenues surpassed the Zacks Consensus Estimate. The company’s loss surpassed the consensus mark for the 26th consecutive quarter.

MTZ lowered its expectation for 2022, considering project delays owing to supply disruptions. Also, the updated guidance considers restarting a large Oil & Gas project that will move into 2023 from the previously planned second-half 2022 project activity.

Elaborating on the performance and looking ahead, Jose Mas, MasTec's CEO, said, "As we have previously indicated, 2022 will mark an important transition year for MasTec, as our operations evolve to take advantage of end market growth opportunities across Communications, Clean Energy & Infrastructure and our recently expanded Power Delivery segments. Accordingly, we remain bullish on significant growth opportunities in 2023 and beyond. That said, our updated 2022 guidance range reflects project timing risks related to solar panel availability and a large Oil & Gas project restart that will move previously planned second half 2022 project activity into 2023."

Inside the Headlines

MasTec reported an adjusted loss of 3 cents per share, which surpassed the Zacks Consensus Estimate of a loss of 13 cents per share. Notably, first-quarter results include acquisition and integration costs related to fourth-quarter 2021 buyouts. In the year-ago period, the reported adjusted earnings were $1.10 per share.

Revenues of $1.95 billion surpassed the consensus mark of $1.79 billion by 9% and increased 10.1% year over year. At March 2022-end, the company had an 18-month backlog of $10.6 billion, up 35% year over year. It also grew 7% from the end of fourth-quarter 2021.

MasTec, Inc. Price, Consensus and EPS Surprise

MasTec, Inc. Price, Consensus and EPS Surprise
MasTec, Inc. Price, Consensus and EPS Surprise

MasTec, Inc. price-consensus-eps-surprise-chart | MasTec, Inc. Quote

Segment Update

Revenues from Communications grew 16.8% year over year to $664.2 million. Adjusted EBITDA margin was up 240 basis points (bps) to 6.2%.

Clean Energy and Infrastructure’s revenues increased 24.4% year over year to $435.9 million. Adjusted EBITDA margin of 2.5% decreased 60 bps from the year-ago figure.

Revenues from the Oil and Gas segment dropped 70.9% from the year-ago figure to $211 million. Adjusted EBITDA margin declined to 11.1% from 23.1% a year ago.

The Power Delivery (formerly known as Electrical Transmission) segment’s revenues came in at $650.5 million, up 387.3% from $133.5 million in the year-ago quarter. Adjusted EBITDA margin came in at 8.2%, up from 2.7% in the year-ago period.

Operational Update

The company reported an adjusted EBITDA of $98.7 million, down from $203.9 million in the prior-year period. The adjusted EBITDA margin declined to 5% from 11.5% in the year-ago quarter.

Financial Details

As of Mar 31, 2022, MasTec had cash and cash equivalents of $233.1 million, down from $360.7 million at 2021-end. Long-term debt (including finance leases) were $1.79 billion, down from $1.88 billion at 2021-end.

In the first quarter, the company provided $131.5 million of cash from operating activities compared with $257.2 million a year ago.

2022 Guidance Updates

The company now expects to generate revenues of $9.2 billion for 2022 versus $9.95 billion expected earlier. Adjusted EBITDA is expected in the range of $850-$875 million versus $950 million of earlier projection. Adjusted earnings are anticipated to be between $4.22-$4.47 versus the earlier expectation of $5.32 per share. The estimated figure indicates a decrease from $5.58 reported in 2021. The Zacks Consensus Estimate for 2022 earnings is currently pegged at $5.25 per share.

Second-Quarter 2022 View

MasTec expects second-quarter revenues of $2.2 billion. Adjusted EBITDA is estimated to be $177 million. Adjusted EBITDA margin is expected to be 8%. The company expects to report adjusted earnings per share of 72 cents for the quarter. The Zacks Consensus Estimate for the second-quarter 2022 earnings is currently pegged at 94 cents per share.

Zacks Rank & Peer Releases

MasTec currently carries a Zacks Rank #4 (Sell). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Quanta Services Inc. PWR reported impressive results for first-quarter 2022. Adjusted earnings and revenues surpassed the Zacks Consensus Estimate and increased impressively on a year-over-year basis.

Quanta’s adjusted earnings increased 65.1% from the year-ago period. The upside was backed by revenue growth across the segments, record total backlog, and solid and safe project execution.

KBR, Inc. KBR reported mixed results for first-quarter 2022, with earnings topping the Zacks Consensus Estimate and revenues missing the same.

On a year-over-year basis, the metrics increased strongly. KBR benefited from solid Government Solutions growth and strong execution across the business.

Jacobs Engineering Group Inc. J reported second-quarter fiscal 2022 (ended Apr 1, 2022) results, with earnings and revenues surpassing their respective Zacks Consensus Estimate and rising year over year.

J’s earnings topped analysts’ expectations in three of the trailing four quarters, with an average of 3.9%.

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