Image: MasTec.

For companies that rely on healthy levels of activity in construction and infrastructure, the current macroeconomic environment has been torture. Infrastructure engineering and installation specialist MasTec (NYSE:MTZ) has seen its stock price remain under pressure during the current period of sluggishness, and a recent report from rival Quanta Services (NYSE:PWR) send MasTec shares falling in concert. Yet coming into Tuesday's third-quarter financial report, MasTec hopes that despite the likelihood of further declines in earnings and sales, it can start to show signs of a long-term turnaround. Let's take a closer look at MasTec to figure out what it's likely to tell investors and what it means for the company's long-term future.

Stats on MasTec

Analyst EPS Estimate

$0.33

Change From Year-Ago EPS

(41%)

Revenue Estimate

$1.14 billion

Change From Year-Ago Revenue

(13.1%)

Earnings Beats in Past 4 Quarters

2

Source: Yahoo! Finance.

Can MasTec earnings turn things around?
Investors have had their confidence in MasTec's earnings potential crushed in recent months, cutting their expectations on third-quarter and full-year 2015 earnings by 40% to 45%. The stock has continued to lose ground, falling 9% since late July.

MasTec's second-quarter report in August showed some of the headwinds that the company has faced recently. Revenue fell 4%, with the company's Electrical Transmission and Communications segments seeing sales declines even as the Power Generation & Industrial and Oil & Gas segments had offsetting increases. The company posted a net loss for the quarter, and even after adjusting for one-time items, the adjusted profit MasTec had was barely a third of what investors had hoped to see from the company. CEO Jose Mas blamed the shortfalls on rain and flooding in several of its businesses along with specific problems affecting the Electrical Transmission business, but the company's future outlook suggested that difficult conditions could last for a while.

Still, MasTec has remained upbeat in general. At an industry conference in September, CFO George Pita discussed some of the encouraging things happening in the energy industry, emphasizing in particular the opportunity that the company has in long-haul pipeline work. MasTec sees itself as having a competitive advantage in long-haul pipelines, which require a rare set of skills that's distinct from more traditional midstream pipeline work. Moreover, Pita noted that Mexico is looking at a major energy infrastructure push that could move natural gas from shale areas in the U.S. to electrical plants south of the border, cutting electricity costs in Mexico and spurring more economic growth. Similar opportunities exist in MasTec's other segments, although Pita admitted that there have been several disappointments, especially on the electrical transmission front.

Yet even as MasTec looked poised to recover from some of its recent weakness, the stock took another hit in mid-October. Quanta Services, which does a lot of work on large electrical transmission projects, reported preliminary results for its third quarter that were less than investors had wanted to see, but the real damage came from a substantial downgrade to Quanta's fourth-quarter guidance. Quanta noted that large electric transmission projects across the industry have seen long delays, and that has caused Quanta to have to fight with MasTec and other smaller competitors for the less extensive projects that are available to try to cover the fixed costs of having an idle workforce. Although Quanta thinks that the poor conditions are temporary, the resulting downward pressure just adds one more obstacle to growth for it as well as MasTec and other industry peers.

In the MasTec report, investors need to focus not only on backward-looking results but also on the company's assessment of what the immediate future will probably look like. If MasTec agrees with Quanta Services that further weakness lies ahead, then investors shouldn't expect a quick turnaround in the stock. Yet if MasTec believes that the worst is over and sees signs of a rebound coming, then now might be a smart time to consider whether MasTec's low share price truly reflects its long-term potential for growth when more typical conditions in the construction and infrastructure industry take hold.

Dan Caplinger has no position in any stocks mentioned. The Motley Fool owns shares of and recommends MasTec. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.