Image: MasTec.

The energy bust has taken its toll on hundreds of companies, and MasTec (MTZ 2.08%) has found itself taking collateral damage from its exposure to customers in the energy industry. The infrastructure engineering and installation specialist counts oil and gas as one of its key segments, and horrible declines in that part of its business has wiped out gains in other areas. Coming into Thursday's fourth-quarter financial report, MasTec investors hope that the company's call for a 2016 turnaround will come true, but it's unclear whether the commodity markets will cooperate. Let's take a closer look at what we're likely to hear from MasTec and whether it will be able to bounce back from a tough 2015.

Stats on MasTec

Analyst EPS Estimate


Change From Year-Ago EPS


Revenue Estimate

$958.6 million

Change From Year-Ago Revenue


Earnings Beats in Past 4 Quarters


Source: Yahoo! Finance.

What's next for MasTec earnings?
In recent months, investors have had to mark down their views on MasTec earnings even further than they had previously, cutting fourth-quarter estimates by a penny per share and reducing their full-year 2016 projections by a nickel. The stock has seen big moves in both directions but is down 14% since mid-November.

MasTec's third-quarter report in November revealed the continuing difficulties that the company has faced in dealing with the energy bust. Revenue fell 15% and net income plunged by 85%. Even though the Communications and Power Generation segments were able to grow their sales slightly, they weren't able to offset the 27% plunge in Oil and Gas-related revenue. Pressure on profits in the Electrical Transmission segment during the quarter also contributed to the sluggish performance from MasTec. The company reduced its full-year revenue guidance by between $100 million and $150 million, and it cut its earnings projections for 2015 by roughly $0.20 per share.

The impact from the energy slump is clear when you compare MasTec's performance to that of industry peer Dycom Industries (DY -1.34%). Dycom shares doubled in 2015, and the company works in many of the same areas that MasTec does. Dycom does work for telecommunications companies and electric and gas utilities, obtaining key infrastructure contracts that have them contributing to the overall growth of their customers. For Dycom, telecom companies have been a key source of business, because the rapid pace at which major players in telecom are working to expand their wireless networks has provided Dycom with a predictable yet large market to serve. Unlike MasTec, Dycom doesn't have substantial direct exposure to the oil and gas market, and that has insulated Dycom in a way that has protected its shares from the damage that MasTec has taken.

One concern that some MasTec investors is the level of debt that the company currently has. In its most recent financial report, MasTec had $1.17 billion in long-term debt, with only $7 million in cash to offset it. For the most part, MasTec doesn't have to worry about near-term liquidity issues, because $400 million of its debt is on senior notes that don't mature until 2023. Nevertheless, with revolving and term loans maturing in 2018 and 2019 that total to almost $600 million, MasTec will face difficulty if interest rates rise before it can restructure its debt if it chooses to do so.

In the MasTec report, investors should watch for signs of a recovery in the oil and gas market. At this point, it seems premature to expect MasTec customers in the energy sector to make major capital expenditures. If the infrastructure company can't convince investors that conditions will get better in 2016, then MasTec could remain weak even at its current low levels.