The construction industry has seen its ups and downs in recent years, but for MasTec (MTZ -0.02%), times have been tough recently. With more of its revenue coming from oil and gas projects than any other source, MasTec has had to deal with the extreme volatility in energy prices and their impact on capital spending budgets for companies looking at major investments.

Coming into Thursday's fourth-quarter financial report, MasTec investors were expecting that more favorable conditions in the energy market could spur a rebound. MasTec's numbers reflect a substantial turnaround in its energy segment, and the company has high hopes that 2019 will be strong as well.

Dug-up pathway up a hill with pipeline laid but not yet connected

Image source: MasTec.

MasTec builds its case

MasTec's fourth-quarter results were encouraging. Revenue of $1.92 billion was up almost 20% from year-ago levels, roughly matching the consensus forecast among those following the stock. Adjusted net income more than doubled from year-earlier results to $83.1 million, and that produced adjusted earnings of $1.07 per share, just topping the $1.06 per share investors were predicting.

Energy has been a key driver of MasTec's results in both directions recently, but this quarter, the impact was unambiguously positive. Revenue for the segment jumped by more than $200 million, or 28%, and adjusted pre-tax operating earnings tripled from the year-earlier period. The power generation and industrial segment also saw big gains, as both revenue and profit from the segment more than doubled on an adjusted pre-tax basis.

Even the slower-performing parts of MasTec's business held their own. Communications revenue was down about 2%, and that pulled adjusted pre-tax operating earnings down by around 20%. Electrical transmission sales also fell 1%, and the segment's bottom line took a $900,000 hit to $5.5 million.

Backlog levels were also encouraging. MasTec's total backlog came in at $7.7 billion, and although that was down slightly from where it was three months ago, it was up 9% since the end of 2017. At the same time, MasTec was also efficient, as its adjusted pre-tax operating margin climbed more than two percentage points to 10.2%.

CEO Jose Mas understands who was responsible for the company's success. "I would like to thank the men and women of MasTec," Mas said, "for helping us deliver a third consecutive year of record financial performance." The CEO also expressed his comfort with record levels of backlog to drive the business forward in 2019.

Check out the latest MasTec earnings call transcript.

Can MasTec keep up the pace in 2019?

MasTec has put itself in position to do whatever it takes to stoke growth in the coming year. As CFO George Pita explained:

We enter 2019 with normalized levels of working capital investment, ample liquidity, and strong and improved year-end leverage metrics, despite significant share repurchase investments made during 2018. Our balance sheet is in excellent shape and provides us ample liquidity to support various opportunities to generate additional value for our shareholders, including share repurchases and strategic acquisitions.

MasTec's guidance for 2019 was ambitious, but in some investors' eyes, it was mixed. The construction specialist believes it will bring in $1.4 billion in revenue during the first quarter, producing adjusted earnings of $0.43 per share. For the full 2019 year, revenue of $7.6 billion would represent another record for the company, and adjusted earnings of $4.34 per share would be 15% higher than 2018 levels. Although the first-quarter guidance was below the consensus forecast among investors, MasTec's full-year calls showed greater optimism than the typical investor had for the company.

That left MasTec shareholders uncertain about how to react to the news, and the stock was unchanged in after-hours trading following the announcement after initially posting a modest rise. There's still a lot of uncertainty in the oil and gas market, and with MasTec getting so much of its business from energy company clients, more clarity on the future direction of energy product prices would be helpful in order to assess the likelihood that greater levels of business activity will be forthcoming in 2019.