MasTec, Inc. Q3 FY2023 Earnings Call

· Earnings call transcript and AI-powered summary

Quarter Overview

  • Q3 revenue was $3.257 billion, up 30% year-over-year (10% organic growth) and 13% sequentially, but below prior guidance.
  • Adjusted EBITDA was $271 million, up 10% year-over-year but materially below expectations.
  • Adjusted EPS was $0.95.
  • Cash flow from operations was $294 million, reducing net debt by $213 million.
  • Backlog ended at $12.5 billion, down 7% from Q2 due to slower activity and high revenue burn in Oil & Gas.

Key Issues and Management Commentary

  • 2023 revenue is now expected to be ~$12 billion, down ~7% vs. prior expectations.
  • Primary driver of shortfall: continued challenges in Clean Energy, especially delays within IEA (acquired in 2022). IEA revenue now expected at ~$1.7 billion for 2023 vs. ~$2.4 billion in 2022.
  • Management cited customer delays tied to tax equity uncertainty and IRA domestic content guidance, stressing these were delays—not cancellations.
  • MasTec is rebuilding forecasting discipline after missing on several quarters, instituting deeper project and customer-level scrutiny.

Segment Performance

Clean Energy

  • Q3 revenue: $1.1 billion; 12% organic growth year-over-year but below guidance.

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Operator: Welcome to MasTec's Third Quarter 2023 Earnings Conference Call initially broadcast on November 1, 2023. Let me remind the participants that today's call is being recorded. At this time, I'd like to turn the conference over to Marc Lewis, MasTec's Vice President of Investor Relations. Marc? Marc Lewis: Thanks, Elaine, and good morning, everyone. Welcome to MasTec's third quarter call. The following statement is made pursuant to the safe harbor for forward-looking statements described in the Private Securities Litigation Reform Act of 1995. In these communications, we may make certain statements that are forward-looking, such as statements regarding MasTec's 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 the initial broadcast of this conference call, and the company does not undertake to update these expectations based on subsequent eventual knowledge. Various risks, uncertainties and assumptions are detailed in our press releases and filings with the SEC. Should one or more of our – these risks or uncertainties materialize or should any of our underlying assumptions prove incorrect, actual results may differ significantly from results expressed or implied in today's call. In today's remarks by management, we will be discussing adjusted financial metrics reconciled in yesterday's press release and supporting schedules. In addition, we may use certain non-GA

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