MasTec, Inc. (MTZ) Earnings & Analysis

Latest quarter

MasTec reported third-quarter revenue of $5.2 billion, above the $4.9 billion consensus and its own $4.9 billion guidance. Adjusted earnings per share were $2.96, above the $2.94 consensus. Revenue rose from $4.0 billion a year earlier, while diluted earnings per share rose to $2.10 from $2.04.

MasTec’s filing attributed the revenue increase to segment results, with organic revenue up approximately 12% and acquisitions contributing $716 million in the quarter. CEO Jose Mas said Power Delivery revenue increased 65% year over year, while Clean Energy and Infrastructure grew 34%. The filing attributed lower Communications revenue primarily to reduced wireless project activity, partly because of customer project timing.

Gross margin fell to 12.8% from 13.6%, and operating margin fell to 5.35% from 6.29%. The filing attributed higher costs as a share of revenue in part to project mix and reduced efficiencies, primarily in Pipeline Infrastructure and Communications. MasTec reported free cash flow of $206.1 million, compared with $36.0 million a year earlier.

Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.

What management said on the call

CEO Jose Mas said demand was accelerating across Power Delivery, including transmission, distribution and electrical infrastructure for data centers. CFO Paul Dimarco said the acquired Superior business was performing ahead of initial expectations and that Power Delivery backlog reached $8.9 billion. Mas said the legacy business also exceeded the company’s forecast for revenue, EBITDA and margins.

In gas generation, Mas said customer demand had accelerated faster than anticipated at the company’s investor day. MasTec had received limited notices to proceed on projects worth more than $1 billion, which he expected to enter backlog over the next few quarters. He also said the company was pursuing turnkey data center work that could bring together construction, electrical and telecommunications services.

Mas said pipeline projects were delayed by an average of approximately 60 days, primarily because of permitting issues, pushing planned starts into the fourth quarter. Dimarco said the pace of mobilization and work on those projects was the main variable in the fourth-quarter outlook. Asked about the delayed work and customer compensation, Mas said customers helped cover costs, but crews were either placed on lower-margin projects or paid while idle at margins below those expected during construction. He did not give a specific figure for the work shifting into 2027.

In Communications, Mas said customer reorganizations and uncertainty about a potential fourth wireless carrier had affected investment decisions. He said cost and efficiency initiatives could improve margins by a couple of hundred basis points in 2027. During and after the quarter, MasTec won approximately 2,100 miles of hyperscaler-related fiber construction, with construction expected to start around the middle of 2027. Asked about the market outlook, Mas said he would expect a roughly flat Communications year in 2027 with better margins.

Guidance

MasTec updated its 2026 adjusted diluted EPS guidance to $8.92 to $9.30, from previous guidance of $9.30. The company also revised its adjusted EBITDA outlook to $1.565-$1.60 billion from approximately $1.60 billion. Dimarco said the range depends principally on the pace of Pipeline Infrastructure project work in the fourth quarter.