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MasTec Inc. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: August 2, 2012 07:24PM

MasTec Inc. (MTZ) filed Quarterly Report for the period ended 2012-06-30. Mastec, Inc. has a market cap of $1.3 billion; its shares were traded at around $15.98 with a P/E ratio of 16.2 and P/S ratio of 0.4. Mastec, Inc. had an annual average earning growth of 41.1% over the past 5 years.



Highlight of Business Operations:

Second quarter 2012 net income from continuing operations was $29.8 million, or $0.36 per diluted share. Second quarter 2011 net income from continuing operations of $41.8 million includes a gain of $17.7 million, net of tax, or $0.20 per diluted share, from the remeasurement of our equity investment in EC Source, which is discussed in Note 3 – Acquisitions and Other Investments in the notes to our condensed unaudited consolidated financial statements. Excluding this gain, second quarter 2011 net income from continuing operations and diluted earnings per share were $24.1 million and $0.28 per share, respectively. As compared with our second quarter 2011 results, excluding the gain on remeasurement, income from continuing operations and diluted earnings per share increased by approximately $5.6 million and $0.09 per share, respectively, or 23.4% and 31.3%, respectively. See “Adjusted Income and Adjusted Net Income per Diluted Share” below.

Revenue. Our revenue was $992.2 million for the three months ended June 30, 2012, as compared with $716.9 million for the same period in 2011, representing an increase of approximately $275.3 million or 38.4%. Of this increase, $44.5 million, or approximately 16.2%, was attributable to businesses acquired in 2011. Organic revenues increased by $230.8 million, or 32.2%. Second quarter 2012 revenues were favorably impacted by demand for our power generation and industrial, electrical transmission and oil and gas pipeline and facility services. Key customers driving growth during the second quarter of 2012 included Mid-American Energy, Duke Energy, Dominion Virginia Power, EQT Corporation and Chesapeake Midstream Partners LP. Second quarter revenue from power generation and industrial projects of $190 million increased by approximately $145 million as compared to the same period in the prior year. The growth in power generation and industrial project work has been driven largely by customers seeking to complete wind installation projects under the current federal production tax credit program, which requires that qualified facilities be placed in service by December 31, 2012. In addition, solar project activity increased versus the prior year. Electrical transmission project activity increased by approximately $58 million, including approximately $15 million of acquisition-related revenue. Second quarter 2012 oil and gas pipeline and facility project revenues were favorably impacted by approximately $102 million of incremental revenues from project activity in the various natural gas shale basins. This growth was offset, however, by a decline in long-haul pipeline project revenues following completion of the Ruby pipeline project in the third quarter of 2011.

Depreciation and amortization. Depreciation and amortization was $21.9 million, or 2.2% of revenue, for the three months ended June 30, 2012, as compared with $18.5 million, or 2.6% of revenue, for the same period in 2011, representing an increase of $3.4 million, or 18.6%. The increase was driven by $1.3 million of acquisition-related depreciation and amortization, as well as approximately $3.8 million of higher organic business depreciation expense. The increase in organic business depreciation expense resulted from increased capital spending beginning in the second half of 2011. Increased depreciation expense for the quarter ended June 30, 2012 was partially offset by a decrease of approximately $1.6 million in amortization expense from historical acquisitions.

Revenue. Our revenue was $1.7 billion for the six months ended June 30, 2012, as compared with $1.3 billion for the same period in 2011, representing an increase of $0.4 billion or 33.9%. Of this increase, $165 million, or approximately 37.5%, was attributable to businesses acquired in 2011. Organic revenues increased by $274.9 million, or 21.2%. First half 2012 revenues were favorably impacted by demand for our power generation and industrial, electrical transmission, install-to-the-home and oil and gas pipeline and facility services. Key customers driving this growth included Mid-American Energy, Duke Energy, Dominion Virginia Power, EQT Corporation and DIRECTV®. Revenue from power generation and industrial projects increased by $218 million to almost $300 million in the first half of 2012 as compared with 2011. The growth in power generation and industrial project work has been driven largely by customers seeking to complete wind installation projects under the current federal production tax credit program, which requires that qualified facilities be placed in service by December 31, 2012. In addition, solar project activity increased versus the prior year. Electrical transmission project activity increased by approximately $108 million, including approximately $56 million of revenue from acquired businesses. Continued strong demand for install-to-the-home project work, in addition to expansion into the northeastern United States as a result of our 2011 acquisition of Halsted, yielded approximately $65 million of increased revenues from install-to-the-home projects in the first half of 2012 as compared with 2011. Approximately $52 million of this increase resulted from the Halsted acquisition. Oil and gas pipeline and facility project revenues in the first half of 2012 were favorably impacted by approximately $200 million of incremental revenue from project activity in the various natural gas shale basins in the first half of 2012 as compared with 2011. This growth was offset, however, by a decline in long-haul pipeline project revenues following completion of the Ruby pipeline project in the third quarter of 2011. Acquisitions contributed approximately $46 million of our first half 2012 oil and gas pipeline and facility revenues.

Depreciation and amortization. Depreciation and amortization was $42.8 million, or 2.5% of revenue, for the six month period ended June 30, 2012, as compared with $33.5 million, or 2.6% of revenue, for the same period in 2011, representing an increase of $9.3 million, or 27.7%. The increase was driven by $7.4 million of higher organic business depreciation expense, as well as $4.2 million of acquisition-related depreciation and amortization. The increase in organic business depreciation expense resulted from increased capital spending beginning in the second half of 2011. Increased depreciation expense for the first half of 2012 was partially offset by a decrease of approximately $2.3 million in amortization expense from historical acquisitions.

Read the The complete Report



Stocks Discussed: MTZ,
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