MasTec (MTZ) Stock Up on Q1 Earnings Beat, Guidance Raised
MasTec, Inc.’s MTZ shares grew 4.3% in after-hours trading on May 6, after it reported impressive first-quarter 2021 results. The top and bottom lines handily surpassed the Zacks Consensus Estimate as well as grew impressively on a year-over-year basis.
Backed by strong first-quarter results and the accretive INTREN acquisition, the company raised its 2021 guidance.
Jose Mas, MasTec's CEO, said, "We are pleased with our strong first quarter results and to be in position to significantly raise our annual 2021 revenue guidance expectation to $8.2 billion, a 30%, or $1.9 billion dollar increase over last year, with approximately $1.2 billion of this increase in our non-Oil & Gas segments. Our recent acquisition of INTREN substantially expands our operations in the electrical distribution and transmission market.
"With this acquisition, our Electrical Transmission segment is expected to approach annualized revenue of approximately $1.2 billion, with sizeable growth opportunities in 2022 and beyond. We also continue to have strong visibility into significant growth opportunities in our Communications and Clean Energy and Infrastructure segments."
Inside the Headlines
MasTec reported adjusted earnings of $1.10 per share, which surpassed the Zacks Consensus Estimate of 77 cents by 42.9% and outpaced its expectation of 80 cents by 37.5%. Encouragingly, the metric grew 83.3% from 60 cents per share in the prior-year quarter.
MasTec, Inc. Price, Consensus and EPS Surprise
MasTec, Inc. price-consensus-eps-surprise-chart | MasTec, Inc. Quote
Revenues of $1.78 billion topped the consensus mark of $1.63 billion by 8.8% and increased 25% year over year. Also, the reported figure outpaced MasTec’s expectation of $1.65 billion by 7.9%.
At quarter-end, the company had an 18-month backlog of $7.9 billion, flat sequentially.
Segment Update
Revenues from Communications fell 11.7% year over year to $568.6 million. Adjusted EBITDA margin rose 70 basis points (bps) to 8.6%.
Electrical Transmission segment’s revenues came in at $133.5 million, up 4.2% from the year-ago quarter. Adjusted EBITDA margin came in at 2.7%, 380 bps down from the year-ago period.
Clean Energy and Infrastructure’s revenues surged 22.4% year over year to $350.4 million. Adjusted EBITDA margin of 3.1% improved 140 bps from the year-ago figure.
Revenues from the Oil and Gas segment rose a notable 102% from the year-ago figure to $725.5 million. Adjusted EBITDA margin also improved an impressive 240 bps to 23.1%.
Operational Update
The company reported adjusted EBITDA of $203.9 million, up 72.8% from the prior-year period. Adjusted EBITDA margin also improved 320 bps to 11.5%.
Financial Details
As of Dec 31, 2020, MasTec had cash and cash equivalents of $512.4 million compared with $423.1 million at 2020-end. In the first quarter, the company provided $257.2 million of cash from operating activities compared with $203.3 million a year ago.
2021 Guidance
Its 2021 guidance indicates a 30% year-over-year improvement in revenues. It also expects non-Oil & Gas segments’ revenues to improve $1.2 billion from a year ago.
The company now expects to generate record revenues of $8.2 billion in 2021, up $400 million from the previous projection of $7.8 billion. Adjusted EBITDA is now expected to be $930 million (up from $875 million projected earlier). Adjusted earnings are anticipated to be $5.40 per share, reflecting an increase from the prior projection of $5. The estimated figure indicates an increase from $5.11 reported in 2020.
Second-Quarter View
MasTec expects second-quarter revenues of $2.1 billion. Adjusted EBITDA is estimated to be $229 million, suggesting growth from $165.7 million reported a year ago. Adjusted EBITDA is anticipated to be 10.9%, implying a rise of 30 bps year over year. Adjusted earnings per share for the second quarter are expected to be $1.25, pointing to growth from 30 cents in the prior-year quarter.
Zacks Rank
MasTec — which shares space with EMCOR Group, Inc. EME, Dycom Industries Inc. DY and Great Lakes Dredge & Dock Corp. GLDD in the Zacks Building Products - Heavy Construction industry — currently carries a Zacks Rank #3 (Hold).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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