MasTec stock tumbles on CAPEX shaves, but fundamentals remain positive

In Featured News by Wireless Estimator

MasTec, Inc. reported mixed results for Q2 on Friday, with earnings beating the Zacks Consensus Estimate, but revenues of $2.87 billion missed their target mark of $3.01 billion by 3.1%. Nonetheless, it jumped 25% from $2.3 billion a year ago.

However, the stock has taken a beating in the past three sessions, closing today at $92.70 from its closing on Thursday of $120.96, a 23% loss.

Clean Energy and Infrastructure skyrocketed 96.1% year over year to $969.7 million. However, their Communications group grew only 5.7% year over year to $868.7 million from $822 million.

As of June 30, 2023, MasTec had approximately $900 million in liquidity, including cash and cash equivalents of $119.9 million. At the end of 2022, it had cash and cash equivalents of $370.6 million. Long-term debt (including finance leases) was $3.15 billion, slightly up from $3.05 billion at the end of 2022.

Management said it expects to generate revenues in the range of $12.7-$13.0 billion in 2023, down from the earlier guidance of $13-$13.2 billion.

For the third quarter of 2023, the company expects revenue to range from $3.8 billion to $3.9 billion.

MasTec CEO Jose Mas said, “We have strong growth potential in all of our markets, and we are well-positioned to capitalize on these opportunities in all of our segments. While we are disappointed with the second half revenue expectations, our focus on improving margins has materialized and we expect this to continue in the second half of 2023 and we expect to enter 2024 with significant revenue growth and margin expansion.”

MasTec reported a $5.42 billion backlog in its Communications group, $389 million more than reported in June 2022. They estimate their 18-month backlog for all segments to be $13.44 billion, up 22% compared to last year’s second quarter.