Infrastructure and construction activity globally has been subdued at best, with several regions of the world seeing much more sluggish economic growth than in past years. That's bad news for MasTec (MTZ 0.34%), which offers engineering and installation services for infrastructure projects, and as investors prepared for MasTec to release its second-quarter financial report, they feared that ongoing weakness would continue. Yet MasTec only gave preliminary numbers for the second quarter in its release on Thursday night, and said that it planned to file its late 2014 annual report and its first-quarter 2015 report within the next two weeks. Let's take a closer look at what MasTec said and how its quarter seems to have gone.

Stats on MasTec

Analyst EPS Estimate


Change From Year-Ago EPS


Revenue Estimate

$1.02 billion

Change From Year-Ago Revenue


Earnings Beats in Past 4 Quarters


Source: Yahoo! Finance.

Will MasTec earnings disappoint investors?
Even before the preannouncement, investors were anxious about MasTec earnings, reducing their second-quarter projections by nearly a dime per share and making more severe cuts for the full 2015 year. The stock has been roughly flat since late April.

MasTec has had trouble due to the recent weakness in the oil and gas industry, which had been a source of significant potential growth for the company prior to the plunge in crude oil prices last year. In the first quarter of 2015, MasTec's took a 14% hit to revenue from its energy segment. MasTec's other major sources of revenue, including business related to the electric and telecom industries, did well enough to more than offset the energy-related declines, but MasTec didn't earn nearly as much in the first quarter as investors had expected.

MasTec's preannounced second-quarter estimates continued to give investors a mixed picture of the company's success. The guidance includes revenue of $1.1 billion, which would go a long way toward wiping out the sales decline that investors have expected. Yet again, MasTec's earnings will likely prove disappointing, with projections for adjusted net earnings of between $0.10 and $0.13 per share, less than half the consensus estimate for the company.

MasTec blamed heavy rains and flooding in many of its work areas for the poor results in the second quarter. In addition, it said that project inefficiencies and lower revenues from the electrical transmission segment would hit overall results, noting that segment employees have had to deal with issues raised by the company's audit committee in connection with its independent investigation, distracting them from bringing in new business and maximizing operating efficiency.

The good news in the preannouncement, though, is that MasTec doesn't seem to believe that major revisions will be necessary in connection with the potential accounting issues it found earlier this year. It said it would file its late 2014 annual report and see an increase of $300,000 in net income to $115.9 million. Subsequently, MasTec expects to file its late first-quarter 2015 report by August 10, with a $500,000 reduction in net losses again representing a favorable adjustment for the company.

With an end in sight to the company's accounting issues, MasTec investors need to see signs from the company in its coming financial report that it is ready to refocus on recovering from poor macroeconomic conditions in several of its key business segments. In many ways, there's only so much that MasTec can do until the energy market recovers, but trying to reallocate resources to more successful niches of the infrastructure business might serve to get itself back on track toward the growth trajectory that investors really want to see.