MasTec (MTZ) Misses on Q3 Earnings & Revenues, Trims '23 View
MasTec, Inc. MTZ reported weak results for third-quarter 2023, wherein earnings and revenues missed the Zacks Consensus Estimate. Earnings declined but revenues increased on a year-over-year basis. The quarterly results were impacted by continued delays on certain Clean Energy and Infrastructure segment project start dates as well as lower-than-expected revenues from the Communications and Power Delivery segments. Also, higher costs added to the woes.
Given the above-mentioned headwinds, the company has also lowered its expectations for 2023.
MasTec’s shares lost 12.3% in the after-hours trading session on Oct 31.
MasTec, Inc. Price, Consensus and EPS Surprise
MasTec, Inc. price-consensus-eps-surprise-chart | MasTec, Inc. Quote
Inside the Headlines
Adjusted earnings per share (EPS) of 95 cents per share missed the Zacks Consensus Estimate of $1.92 by 50.5%. The bottom line declined 29.1% from the $1.34 reported in the year-ago period. The reported number came below MTZ’s expectation of $1.85-$2.13.
Revenues of $3.26 billion missed the consensus mark of $3.83 billion by 15%. Nonetheless, the top line jumped 29.6% from $2.51 billion a year ago.
At September-end, it had an 18-month backlog of $12.49 billion, up 11.2% from $11.23 billion a year ago. The metric, however, slipped 7.1% from $13.44 billion sequentially.
Segment Update
Revenues from Communications slipped 7.3% year over year to $824.4 million, much lower than our projection of $876.7 million. Adjusted EBITDA margin contracted 290 bps to 9.5%.
Clean Energy and Infrastructure’s revenues skyrocketed 95.3% year over year to $1,099.9 million. Our model had predicted segment revenues of $1,321.2 million for the quarter. Adjusted EBITDA margin was 5.2%, up from 4.4% in the year-ago quarter.
Revenues from the Oil and Gas segment grew 78.9% from the year-ago figure of $672.3 million, higher than our expectation of $661.9 million. Adjusted EBITDA margin improved to 14.5% from 13.4% a year ago.
The Power Delivery (formerly known as Electrical Transmission) segment’s revenues totaled $665 million, down 3.4% from the year-ago quarter. This is lower than our projection of $801.5 million. Adjusted EBITDA margin came in at 8.6%, down 350 bps from the year-ago period.
Operational Update
MasTec reported adjusted EBITDA of $271.1 million, up 10.4% from $245.6 million in the prior-year period. Adjusted EBITDA margin declined to 8.3% from 9.8% in the year-ago quarter.
Financial Details
As of Sep 30, 2023, MasTec had approximately $1.16 billion in liquidity, including cash and cash equivalents of $214.2 million. At the end of 2022, it had cash and cash equivalents of $370.6 million. Long-term debt (including finance leases) was $3.03 billion, slightly down from $3.05 billion at 2022-end.
In the first nine months of 2023, net cash provided by operating activities was $196.6 million, up from $118.7 million a year ago.
Q4 View
Adjusted EBITDA is estimated to be $221 million, implying a decline from $257.9 million a year ago.
Adjusted EBITDA margin is projected to be 6.7%. The metric was 8.6% in the prior year.
The company estimates adjusted EPS to be 44 cents for fourth-quarter 2023, suggesting a decline from the previous year’s figure of $1.03.
2023 Guidance Trimmed
Adjusted EBITDA is now anticipated to be $850 million (prior projection: $1.05-$1.10 billion).
Adjusted EBITDA margin is now projected to be 7.1%, indicating a decline from 8% a year ago. MTZ earlier suggested the metric to be 8.2-8.5%.
Adjusted EPS is now anticipated to be $1.75, down from the previous expectation of $3.75-$4.19. In 2022, MTZ reported adjusted EPS of $3.05.
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.
Vulcan Materials Company VMC reported stellar results for the third quarter of 2023, surpassing the Zacks Consensus Estimate for both earnings and revenues.
VMC’s adjusted EPS of $2.29 increased 28.7% from the year-ago level of $1.78. Total revenues of $2,185.8 million increased 4.7% year over year.
Otis Worldwide Corporation OTIS reported impressive results in third-quarter 2023. Its earnings and net sales surpassed the Zacks Consensus Estimate and rose on a year-over-year basis. Its quarterly results reflected 12 consecutive quarters of organic sales growth and solid operating margin expansion, contributing to high-teens adjusted EPS growth.
OTIS reported quarterly EPS of 95 cents, increasing 18.8% from the year-ago quarter’s figure of 80 cents. Net sales of $3.52 billion rose 5.4% on a year-over-year basis.
United Rentals, Inc.’s URI third-quarter 2023 earnings and revenues surpassed the Zacks Consensus Estimate. On a year-over-year basis, earnings and revenues increased courtesy of sustained growth across the business, profitability and returns, underpinned by broad-based activity.
URI’s adjusted EPS of $11.73 increased 26.5% from the prior-year figure of $9.27. Total revenues of $3.77 billion grew 23.4% year over year.
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