What happened
Shares of MasTec (MTZ 2.31%) rose over 16% on Friday, after the company reported second-quarter 2019 operating results. The infrastructure leader grew quarterly revenue 20% and grew net income 49% compared with the year-ago period. The business generated a stunning $351 million in cash from operations during the first half of the year.
The record operating results were well ahead of the company's expectations, which prompted management to increase full-year 2019 guidance. In addition to new expectations for the current year, CEO Jose Mas told investors he was confident that MasTec was well positioned to capitalize on growth opportunities in 2020 and beyond.
As of market close on Friday, Aug. 2, the stock had settled to a 15.8% gain.
Image source: Getty Images.
So what
The infrastructure services company is certainly making the most of lucrative growth opportunities across the country. MasTec has pounced on strong oil and gas spending in recent years, while massive investments to support the nationwide rollout of 5G networks bode well for the business in the coming years. First-half 2019 operating results demonstrate that shareholders have relatively little to complain about when it comes to the health of operations.
|
Metric |
First Half 2019 |
First Half 2018 |
Change (YoY) |
|---|---|---|---|
|
Revenue |
$3.45 billion |
$3.01 billion |
15% |
|
Earnings before income taxes |
$215 million |
$154 million |
40% |
|
Net income |
$163 million |
$107 million |
53% |
|
Diluted earnings per share (EPS) |
$2.15 |
$1.32 |
63% |
|
Average shares outstanding |
75.1 million |
80.0 million |
(6%) |
|
Cash flow from operations |
$351 million |
$23.2 million |
1,413% |
Data source: Press release. YOY = Year over Year.
MasTec reported year-over-year revenue growth in each major segment -- communications, oil and gas, electrical transmission, and power generation -- in Q2 carried by unique trends in each industry. The healthy level of diversification makes the strong start to the year all the more promising and sustainable.
Now what
The company now expects full-year 2019 revenue of approximately $7.7 billion, up from the most recent expectation of $7.6 billion. Net income is now expected to be $375 million for the year, a sizable increase from the previous expectation for $335 million. Given the strength of operations and the growth opportunities ahead, and the fact that shares trade at less than 12 times future earnings, investors should feel relatively confident about the company's future.
