MasTec, Inc. (MTZ) shares took off on Friday, climbing over 10% in early trading, driven by a strong third-quarter earnings report and an optimistic outlook for the future. The company, a leading provider of infrastructure construction services, exceeded analysts’ expectations on both revenue and earnings for the quarter.
MasTec reported revenue of $3.25 billion for the third quarter, narrowly missing the consensus estimate of $3.42 billion. However, the company’s strong performance was evident in other key metrics. Adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) climbed to $305.9 million, up from $271.1 million in the same period last year, with margins expanding to 9.4% from 8.3% a year ago. The company’s adjusted earnings per share (EPS) of $1.63 also surpassed expectations, coming in higher than the consensus estimate of $1.23.
MasTec’s robust backlog, a key indicator of future revenue potential, continued to expand. As of September 30, the company’s 18-month backlog stood at $13.9 billion, a $1.4 billion increase from the third quarter of 2023.
Looking ahead, MasTec’s management team expressed confidence in the company’s future prospects, pointing to favorable macro trends in its end markets. The company forecast adjusted EPS of $1.29 for the fourth quarter, exceeding the consensus estimate of $0.94. Revenue for the quarter is projected to reach $3.325 billion, slightly ahead of the estimated $3.318 billion.
MasTec also revised its full-year 2024 guidance, raising adjusted EPS expectations from $3.03 to $3.75, surpassing the consensus estimate of $3.04. However, the company lowered its sales guidance from $12.40 billion to $12.225 billion, slightly below the street view of $12.399 billion.
Paul DiMarco, MasTec’s Executive Vice President and Chief Financial Officer, highlighted the company’s strong cash flow generation. “We again significantly exceeded our cash flow targets, generating $278 million of cash flow from operations in the quarter and driving net debt leverage down to 2.2x,” DiMarco said.
Investors seeking exposure to MasTec can consider exchange-traded funds (ETFs) like the Invesco S&P Midcap 400 Pure Value ETF (RFV) and the SHRT (SHRT).
The strong earnings report and optimistic outlook have fueled investor enthusiasm, sending MasTec shares surging in early trading. The stock’s positive performance reflects confidence in the company’s ability to navigate a dynamic market landscape and capitalize on growth opportunities in the infrastructure sector.
