MasTec, Inc. MTZ reported fourth quarter 20Array5 adjusted earnings (excluding one-time items barring non-cash stock compensation expense) of Array8 cents per share, surpassing the Zacks Consensus Estimate of ArrayArray cents. Earnings plunged 50% from 36 cents per share earned in the prior-year quarter.
Including one-time items, MasTec incurred a loss of 96 cents per share. The company had reported earnings of 32 cents per share in the year-ago quarter.
Operational Update
MasTec’s net sales decreased Array6.6% year over year to $Array.03 billion in the quarter. Revenues beat the Zacks Consensus Estimate of $952 million. Revenues in the Oil and Gas segment decreased Array8.8% to $350.9 million while the same in Electrical Transmission decreased 50% year over year to $7Array million. Revenues in the Power Generation and Industrial segment decreased Array5.5% to $79.3 million. Revenues at the Communication segment were down 7% at $52Array million.
Cost of sales in the quarter decreased Array3.8% year over year to $9Array6 million. Gross profit declined 20.6% to $ArrayArrayArray million from $Array68 million in the year-ago quarter. Gross margin contracted 280 basis points to Array0.8% in the quarter.
General and administrative expenses decreased Array7% year over year to $58.8 million. Operating profit declined 46% to $52 million in the quarter from $97 million in the prior-year quarter. Consequently, operating margin contracted 300 basis points (bps) year over year to 5%. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) were $82 million as against $Array09.7 million in the prior-year quarter.
Financial Details
MasTec ended 20Array5 with cash and cash equivalents of $Array.Array3 billion, down from $Array.53 billion as of 20Array4-end. The company generated cash flow from operations of $367 million as of Dec 3Array, 20Array5 compared with $323 million as of Dec 3Array, 20Array4. Long-term debt was $945.5 million as of Dec 3Array, 20Array5 compared with $Array.06 billion as of Dec 3Array, 20Array4. MasTec has authorized the repurchase of up to $Array00 million worth of shares.
20Array5 Performance
MasTec reported adjusted earnings per share of 54 cents in 20Array5, (excluding one-time items barring non-cash stock compensation expense) down 63% from $Array.46 recorded in the prior year. Earnings however beat the Zacks Consensus Estimate of 47 cents. Revenues decreased to $4.2 billion from $4.6 billion in 20Array4 but surpassed the Zacks Consensus Estimate of $4.Array billion.
Guidance
For full year 20Array6, MasTec expects adjusted earnings per share between $Array.35 and $Array.45 on the back of revenues of $4.6 billion to $4.8 billion. Adjusted EBITDA is projected in a range of $4Array5 million to $430 million. For the first quarter of 20Array6, MasTec expects adjusted bottom line between a loss of 3 cents per share and breakeven, and revenues of $0.95 billion. The guidance reflects expected seasonality and timing of project startups, given that the first quarter results are typically the lowest of the year. The company stated that adjusted EBITDA will be approximately 5% to 6% of revenues.
Coral Gables, FL-based MasTec is a leading infrastructure construction company that operates primarily in North America and caters to a range of industries. Its services include engineering, building, installation, maintenance and upgrade of energy, utility and communications infrastructure as well as industrial infrastructure.
At present, MasTec has a Zacks Rank #4 (Sell).
Some better-ranked stocks in the construction sector are Dycom Industries Inc. DY, Watsco Inc. WSO and NCI Building Systems Inc. NCS. All these stocks carry a Zacks Rank #2 (Buy).
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