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MasTec (MTZ) Up 20.4% Since Last Earnings Report: Can It Continue?
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It has been about a month since the last earnings report for MasTec (MTZ - Free Report) . Shares have added about 20.4% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is MasTec due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
MasTec Misses on Q3 Earnings & Revenues, Trims '23 View
MasTec 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.
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. 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. 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. 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. Adjusted EBITDA margin came in at 8.6%, down 350 bps from the year-ago period.
Operational Update
MasTec reported an adjusted EBITDA of $271.1 million, up 10.4% from $245.6 million in the prior year. 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.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
The consensus estimate has shifted -76.43% due to these changes.
VGM Scores
Currently, MasTec has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise MasTec has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.
Performance of an Industry Player
MasTec belongs to the Zacks Building Products - Heavy Construction industry. Another stock from the same industry, Emcor Group (EME - Free Report) , has gained 2.3% over the past month. More than a month has passed since the company reported results for the quarter ended September 2023.
Emcor Group reported revenues of $3.21 billion in the last reported quarter, representing a year-over-year change of +13.5%. EPS of $3.61 for the same period compares with $2.16 a year ago.
For the current quarter, Emcor Group is expected to post earnings of $3.51 per share, indicating a change of +33.5% from the year-ago quarter. The Zacks Consensus Estimate has changed +8.3% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #1 (Strong Buy) for Emcor Group. Also, the stock has a VGM Score of B.
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MasTec (MTZ) Up 20.4% Since Last Earnings Report: Can It Continue?
It has been about a month since the last earnings report for MasTec (MTZ - Free Report) . Shares have added about 20.4% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is MasTec due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
MasTec Misses on Q3 Earnings & Revenues, Trims '23 View
MasTec 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.
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. 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. 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. 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. Adjusted EBITDA margin came in at 8.6%, down 350 bps from the year-ago period.
Operational Update
MasTec reported an adjusted EBITDA of $271.1 million, up 10.4% from $245.6 million in the prior year. 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.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
The consensus estimate has shifted -76.43% due to these changes.
VGM Scores
Currently, MasTec has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise MasTec has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.
Performance of an Industry Player
MasTec belongs to the Zacks Building Products - Heavy Construction industry. Another stock from the same industry, Emcor Group (EME - Free Report) , has gained 2.3% over the past month. More than a month has passed since the company reported results for the quarter ended September 2023.
Emcor Group reported revenues of $3.21 billion in the last reported quarter, representing a year-over-year change of +13.5%. EPS of $3.61 for the same period compares with $2.16 a year ago.
For the current quarter, Emcor Group is expected to post earnings of $3.51 per share, indicating a change of +33.5% from the year-ago quarter. The Zacks Consensus Estimate has changed +8.3% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #1 (Strong Buy) for Emcor Group. Also, the stock has a VGM Score of B.