MasTec, Inc. Q2 FY2020 Earnings Call

· Earnings call transcript and AI-powered summary

Overall Performance

  • Q2 2020 revenue: $1.569 billion (met guidance).
  • Adjusted EBITDA: $166 million (exceeded high end of guidance by $6 million; beat consensus by $14 million).
  • Adjusted EPS: $0.95 (beat guidance by $0.06 and consensus by $0.15).
  • Operating cash flow: $293 million (record first half at $497 million).
  • Backlog: $8.2 billion (record second quarter level).
  • 2020 revenue guidance: ~$7 billion, down about $200 million or 3% from 2019 despite significant COVID-19 impacts.

Key Themes

  • COVID-19 created operational challenges (permitting delays, social distancing, home-entry restrictions), but core operations continued as “essential services.”
  • Strong diversification helped offset an $800 million year-over-year decline in oil and gas revenue.
  • Clean Energy and Infrastructure is emerging as a major growth engine and expected to be larger than oil and gas by 2022.
  • Robust cash flow and liquidity ($1.3 billion expected post-refinancing) positioning MasTec for strategic M&A and potential share repurchases.

Segment Highlights

Communications
  • Revenue: $654 million (flat year-over-year but negatively impacted by COVID-related permitting and home-entry restrictions).
  • Margins: 11.7% (up 370 bps YoY and up 380 bps sequentially).

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Operator: Welcome to the MasTec Second Quarter 2020 Earnings Conference Call, initially broadcast on July 31, 2020. Let me remind participants that today's call is being recorded. And at this time, I would like to turn the call over to your host today Marc Lewis, MasTec's Vice President of Investor Relations. Marc? Marc Lewis: Thank you, Sara, and good morning, everyone. Welcome to MasTec's second quarter call. The following statements made pursuant to the safe harbor for forward-looking statements described in the Private Securities Litigation Reform Act of 1995. In these communication, we may make certain statements that are forward-looking, such as statements regarding MasTec future results, plans and anticipated trends in the industries where we operate. These forward-looking statements are the company's expectations on the day of initial broadcast of this conference call, and the company does not undertake to update these expectations based on subsequent events or knowledge. Various risks, uncertainties and assumptions are detailed in our press releases and filings with the SEC. Should one or more of these risks or uncertainties prove incorrect or should be this information would be changing the results may differ significantly from results expressed or implied in these communications. In today's remarks by management, we will be discussing adjusted financial metrics as discussed and reconciled in yesterday's press release and supporting schedules. In addition, we may

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