MasTec (NYSE:MTZ) depends on a healthy construction business in order to help drive its overall results, and a lot of the success the company has had over the years is in serving the oil and gas industry. When energy is in the doldrums, MasTec faces big potential struggles -- at least until things start to turn around and orders flow in again.

Coming into Monday's first-quarter financial report, MasTec investors hoped the company would be able to make good on its promise to produce impressive gains in revenue and profit as conditions continued to improve for the oil and gas industry. MasTec posted strong results, including record levels of backlog that led the company to boost its guidance for the remainder of the year and lifted investors' spirits.

Hill with an excavation for a pipeline going up the side.

Image source: MasTec.

MasTec keeps building

MasTec's first-quarter results continued the positive momentum the company generated recently. Revenue jumped 21% to $1.40 billion, which was a record performance for a first quarter in the construction specialist's history. Adjusted net income of $28.8 million translated to $0.35 per share in adjusted earnings, crushing the $0.20 per share projection MasTec had provided in its guidance a few months ago.

Big bounces in formerly hard-hit areas like the industrial and energy segments kept helping to drive MasTec forward. The power generation and industrial unit saw revenue more than double from year-ago levels, and the larger oil and gas segment enjoyed an 18% jump to lead all segments in terms of absolute dollar-value increases in sales. Gains of 12% in communications and 15% in electrical transmission also helped to keep MasTec's top line moving higher.

Although sales have been improving, MasTec still faces challenges in translating its success into profit growth. The communications segment saw pre-tax operating profit jump by 70%, but oil and gas segment profits were down 65%. MasTec's other units contribute only small amounts to its overall bottom line, so their gains didn't do much to offset the weakness in oil and gas profitability.

MasTec's backlog figures continued to increase. Total 18-month backlog figures climbed about half a billion dollars to $7.6 billion, with the oil and gas, communications, and power generation and industrial segments all climbing above their old high-water marks. Even the electrical transmission unit saw improvements in its segment backlog during the quarter.

CEO Jose Mas was quite encouraged about what he saw. "We are proud to once again report record backlog levels," Mas said, "demonstrating the strength in demand for our services across multiple markets."

What's ahead for MasTec?

MasTec has full confidence that its growth will last for years to come. As it has explained before, the backlog numbers most investors follow cover only those projects it expects to complete within the next 18 months. Yet both Mas and CFO George Pita noted that the company has many multiyear programs that will generate future business beyond that short-term timeframe, and the fact that MasTec can predict success into the far future gives it visibility that many similar companies lack. Combined with a strong balance sheet, MasTec should be able to address future needs effectively.

MasTec boosted its full-year guidance. The company now expects adjusted earnings of $3.65 per share, $0.20 higher than its previous forecast, and sales of $6.9 billion, up by $150 million. For the second quarter, revenue of $1.78 billion and adjusted earnings of $1.03 per share would be mixed in most investors' eyes, but MasTec has often outperformed its initial guidance.

MasTec shareholders were happy with the report, and the stock climbed 6% on Tuesday following the announcement. Given that oil prices continue to improve, it's likely that MasTec will get even bigger contributions from that segment for the remainder of the year.

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