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Investors might have done a double-take upon seeing what fueled MasTec's (MTZ -1.56%) strong second-quarter results. While the oil and gas sector has hampered the results of most other companies that touch the industry, it is actually driving results at MasTec. That is due in part to the recent ramp-up of construction on several pipeline projects, which is leading the company to boost its full-year guidance.

MasTec results: The raw numbers

Metric

Q2 2016 Actuals

Q2 2015 Actuals

Growth (YOY)

Revenue

$1.23 billion

$1.07 billion

15.5%

Adjusted net income

$29.9 million

$8.1 million

269.1%

Adjusted EPS

$0.36

$0.10

260%

YOY = year over year. Data source: MasTec, Inc.

What happened with MasTec this quarter? 

Oil and gas fueled the expectation-beating earnings results:

  • Revenue was at the high end of the company's guidance range of $1.1 billion to $1.25 billion. Meanwhile, adjusted earnings were $0.09 per share above the high end of its $0.17 to $0.27 per share guidance range. 
  • Revenue growth was strongest in the company's communications segment, with revenue surging 26.3% to $592.2 million. Meanwhile, adjusted EBITDA in the segment grew by 37% to $66.6 million.
  • While revenue in the oil and gas segment only grew 3.7% to $425.6 million, adjusted EBITDA jumped 36.8% to $56.5 million. Those strong earnings fueled MasTec's expectation-beating results. 
  • Electrical transmission revenue grew 23.3% to $95 million; however, that segment's adjusted EBITDA was a negative $7.8 million. Still, that is a vast improvement from last year's negative $21.4 million in adjusted EBITDA. 
  • Power generation and industrial revenue also jumped -- up 16.1% -- however, adjusted EBITDA slumped 40% to $4.8 million.

What management had to say 

CEO Jose Mas commented on the company's results, saying:

Our second quarter results significantly exceeded our expectations, primarily due to improved productivity in our Oil & Gas segment. We expect record levels of Oil & Gas segment revenue during the second half of 2016 as we further ramp execution on large projects initiated at varying times during the 2016 second quarter. Most importantly, we have clear visibility to opportunities in the Oil & Gas segment which we expect will drive continued growth in 2017 and beyond. It is also important to note that in addition to the strong 2016 second quarter performance in our Oil & Gas segment, we also experienced significant growth in our Communications segment, and began to see improvement, as expected, in our Electrical Transmission segment. We expect these positive trends to continue, driving improved revenue and operating margin performance during the second half of 2016.

One of the big drivers during the quarter was the ramp up of construction of two pipelines the company is building near the Mexico border to increase U.S. natural gas exports to that country. These projects are part of a $1.363 billion consortium between MasTec, Mexican billionaire Carlos Slim, and U.S. energy infrastructure giant Energy Transfer Partners (ETP). These projects are expected to be in service early next year.

Looking forward 

With a pipeline full of projects underway, MasTec is very optimistic about the balance of the year. Because of that, the company is boosting its full-year guidance once again. It now expects full-year revenue to be around $5 billion, which is up from last quarter's range of $4.8 billion to $5 billion and its original range of $4.6 billion to $4.8 billion. Meanwhile, it now projects adjusted earnings to be about $1.57 per share, which is well above the $1.37 to $1.47 per share it expected last quarter and its initial guidance range of $1.35 to $1.45 per share.