MTZ - Earnings call transcript Q3 2017

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Operator

Good day, everyone, and welcome to MasTec's Third Quarter 2017 Earnings Conference Call, initially broadcast on November 3, 2017.

Let me remind participants that today's call is being recorded. At this time, I'd like to turn the call over to Marc Lewis, MasTec's Vice President of Investor Relations. Marc, please go ahead.

J. Marc Lewis

Thank you, Dana. everyone. morning, Good third MasTec's earnings call. conference Welcome quarter to XXXX pursuant Safe the Harbor The Securities following forward-looking the made is XXXX. of in statement for to statements Reform Act Litigation Private described regarding certain communications, these are as plans, industries in we anticipated make where MasTec's In statements we results, future operate. may forward-looking, that such trends the and statements undertake expectations call the initial broadcast the on forward-looking are and company or These the of knowledge. statements these the day company's to does events subsequent not this based expectations conference update on of Various risks, are detailed press our with in filings the uncertainties and assumptions releases and SEC. or today's underlying or uncertainties assumptions call. one expressed differ materialize our actual of incorrect, results of may results any Should these prove significantly more in or implied risks from should or remarks adjusted we and today's and by discussed as press discussing schedules. the in supporting metrics, be reconciled will financial yesterday's release management, In

in talk to about another quarter a great be things discussions President These and lot José have may followed we George. most be and by any addition, this analysis XX-Q, of CFO. George measures or financial reconciliation these Relations have and our Investor had Mas, about we a the We by In to call XX of and us The A review in our measure opening Executive from our minutes. remarks News the CEO; With earnings certain our today. Q&A, call. and measure expect can to last and use our section MasTec.com. reconciled a we will in we website GAAP and press our followed Pita, Vice format financial comments be José XX-K today, financial of in non-GAAP the non-GAAP not comparable call important financial located will found at the release, by

José? get So, we I'll to the going. call José, turn can now over so

José Ramón Mas

well be results our Marc. welcome quarter third call. Good I'll third as to serve. as outlook markets for and XXXX the providing Today, reviewing we Thanks, morning my quarter MasTec's

was $X.XXX quarter third million. quarter. First, some summary, Adjusted third quarter XX% of increase flow Adjusted highlights. the last $XXX And earnings we third $XXX had per $X.XX. an over billion, for operations was was from million. EBITDA In an excellent the quarter for share were cash Revenue year's quarter.

this fact, company's quarter best was the In third history. in the

opportunities importantly, More currently the experiencing. by encouraged and of we I'm number diversity very the are

$XXX value billion; For contract which large our a an awarded transmission am been represent with electric business. million; I including: contract value; and over fiber last to of projects, Again, distribution exceeding I'm projects, two multiple that segments. with utility with months, values $XXX projects, contract $X customer example, value; contract $XXX particular pleased pipeline with agreement that million by we one previously-announced levels million announce awards, an exceeding all projects, across expected our approximately of the significantly activity distribution electric will biomass of our encouraged exceeding $X.X expand with the of large over wind expected contract expected project few an have farm billion; value

our the We of level other see just and seeing scale and of and across are activity mentioned, similar number demand believe to increasing will to ones a all size continue in we opportunities strongly of I segments.

excited and year We very beyond. opportunities about the to MasTec. we're XXXX expect XXXX another record be accelerating And for for

$X end growth backlog, we with XXXX with also exceeding billion all across record yesterday announced expect to We that year-over-year segments.

earnings. our into third one last I industry quarter comment specifics, about than to Before like expected. better were I'd Earnings make get

Our $XXX EBITDA our of million $XXX adjusted of beat million. guidance

why this we from more It's to and important side, came where the we margin revenue expectations. On get significantly didn't beat understand flow-through.

the somewhat as that with was associated was one the and project margin both contract creating costs and particular on Gas in are beat increases, earnings value margins representative anticipate This note on the stay business, the previously contract don't to unique relatively power nature. in segment. third contract an I'd & structure job the and increase revenue not this demonstrated. is we primarily cost-reimbursable value pressure of of we similar structure margin quarter Oil equal, Thus, XXXX. Our our dollars in as that have in like

some would Now, I cover like to industry specifics.

fulfillment business revenue in $XXX fulfillment installation was decline in for was and DIRECTV wireline of business up, our wireless decline the the our our cellular in the quarter security and by in slowdown were Our by services softness some million. exit driven delivery home in Revenues services. a offset our business, Communications The business.

slightly was and up Our wireless sequentially. business year-over-year

importantly, more will to be are years. made investments the and we that better coming the visibility long-term optimistic in More have

We also opted expect plans into wireless densification in infrastructure significant major have FirstNet. related progress XX associated initiatives disclosed by XG. with We're encouraged the deployment. Every publicly for Currently, carrier made by XG investments FirstNet. states to and has the

on quarter to FirstNet impact revenues, impact XX% year-over-year, XG significant to demand. an see year, up throughout Wireline XXXX. strong were we XXXX that for and both revenues expect and have the While in accelerate will with the we ramp continue

driven will to in cable opportunities for nationwide future project come. companies to provide Backlog us sequentially in an deployment telephone fiber increase up growth. see projects and segment, both Communications TV fiber operators. continue I'm by confident years with our And We from was this significant

In we grow, $X I expect which to continues backlog to awards of most driver of to The previously XX-month is have in all growth not in future now billion which us. over perform we of of a awarded the be years. continue long-term of fact, and expect we for opportunities and our to projects, as stated, coming fiber pace been

million $XX second the our Moving segment, was quarter, sequentially for Industrial the & Power Generation revenue $XX to in from quarter. third up million

by operational made. and the More importantly, are improvements financial we encouraged we've

from and year-end. backlog was grow million significant see this considerable expect years. now sequentially $XX again segment to $XXX growth coming seen margins, before up revenue million, in and have We the to we improvements expect in to over Backlog we

earlier, Revenue Transmission Electrical number mentioned in awarded quarter. been a business activity million year's be this was in we $XX segment our million I bidding have and in last of projects versus very third $XXX continues to As strong.

More to recent importantly, build much And our continue off of momentum. were margins we improved.

While three satisfied we we're into backlog now in we had a consistent not quarters build as we've margins future. expect Transmission, in year what our with to be transition the

While cycle. active we of backlog down sequentially, very midst slightly in a was are bidding the

well a revenue significant positioned levels. feel opportunities we get We grow exceed have to to historical of or are back and backlog number and

third billion last Our Oil & Gas quarter. the for quarter to revenues of third pipeline revenues of million $X.XXX in compared had year's segment $XXX

Gas quarter, as cost-reimbursable but, earlier, mentioned solid margins had were impacted Our segment I another by Oil & work.

smaller we Looking excited a have by our awarded. into recent award been projects XXXX, we announced as of are other number well as

billion. to Gas for generate levels exceeding $X.X finish XXXX. was with roughly important segment Oil expect XXXX, nearly now billion XXXX XXXX. in expect to revenue It's expectation going to & We $X.X remember backlog that our We into revenues in

into again segment $X generate As billion over we look to revenues. in expect we XXXX,

work. is demand by business pipeline Our U.S. being of driven the in level domestic

Our growing we challenges in Canadian face to has business struggle revenues. as continued

now and RFPs. in seeing We bids the of active are, increase a level considerable however,

in in certain While significant Canada. in have XXXX, will years not a to we impact yet growth we material come this will see believe

bullish about Mexico. also in We remain opportunities

adjusted the While time having this view development increased remain years. year in needs started prices cycle, XXXX and as XXXX levels. the in we the guidance EBITDA. adjusted million, attractive To revenue long-term $XXX had To and $X.X we of excellent record year. billion, commodity have project $X.XX, all adjusted compare, market of to recap, billion guidance a and with an We to an impact EBITDA $X.X coming the EPS million to $XXX significant revenue we're

during by year adjusted XXXX. We million have million now guidance $XXX calendar $XX increased revenue by and EBITDA

to and we're MasTec importantly, the sacrifices. safety, and optimistic I'd XXXX like to this take even to their opportunity better. for their hard work, More of will their men women be thank commitment

George? are call our will people that most about I review. financial asset, ones their we've performance and for Our the we talked the like turn today. it's now our because produce George of to the over numbers can important

George L. Pita

Today, cover full our and and third financial and morning, cash well XXXX José, everyone. updated guidance flow, including good Thanks, as quarter liquidity year I'll capital as structure, expectations. results, increased

the our include non-GAAP financial details be earnings EBITDA. in found and adjusted and Reconciliation press will and measures our adjusted of indicated our discussion guidance As and at on results SEC release, call, Marc the filings. website of can our of beginning all non-GAAP in

comments MasTec history. summary regarding quarterly financial quarter some are virtually Here measures, in by performance, the which represented all performance third best XXXX

project record quarter expectation quarterly our driven last and grew a growth by large oil year's level to activity. both increased over XX% $X.XX billion. Third revenue and was gas Revenue

compare numbers with share, million record Third levels. year. respectively, $X.XX representing quarter These net performance was $X.XX, $XX.X diluted XXXX $XX.X third last or GAAP both metrics million and quarter income per with

XXXX, This was On EBITDA adjusted compares EBITDA a million the level to quarter third revenue. million. XXXX $XXX quarter of basis, of X% for was a representing adjusted rate quarter XXXX Third X.X% increase. $XXX approximately third

XXXX per had generating the cash revenue. the of We despite quarter Third performance, $X.XX of associated strong operations in working share earnings from for quarter flow the diluted third per share with XXXX third flow quarter adjusted record earnings diluted of were quarter, during compared to adjusted $XXX requirements XXXX. $X.XX third capital cash levels million

at increasing earnings now at had are and end excellent Our we liquidity summary, revenue XXXX diluted capital adjusted shape XXXX and share. $XXX expected million billion, quarter as adjusted $X.X expectations annual are and structure earnings flow record new full-year at our guidance to levels, revenue, we in performance cash In per and XXXX. third strong with $X.XX EBITDA

higher segment period increased segment quarterly increased compared project results. cover million, XXXX detail same approximately approximately year, to last was regarding This $XXX to third due billion. our quarter Gas or to activity. level Oil $X.XX we'll some Now, large expectation XX% & revenue than the

to segment was compared XXXX the of revenue of EBITDA Oil prior Gas revenue year. quarter the X.X% period Third XX% same & adjusted of margin in

large of margin adjusted performance. the experienced increased a a quarter During project our XXXX, we reduced this activity project cost-reimbursable on was that primarily and EBITDA on rate basis third

$XXX slightly level million. segment As was expected, Communications $XXX revenue last year's million, below of

year's with or a improved have $XX when million Transmission segment million third results Transmission Electrical EBITDA quarter approximately at adjusted On results sequentially, XXXX X.X% segment XX.X% improved segment revenue. basis, of XX $X again segment, to in when second Third opportunities was second project compared XXXX we adjusted a for this that see Year-to-date performance XXXX to half compared expectation quarter and revenue margin approximate improved and segment to with would EBITDA adjusted consistent quarter sequential the last last our year. margin On is EBITDA previously-indicated basis, of performance second Electrical compared the of XX.X% to Communications XXXX, this as with beyond. end-market, XXXX improve year and expected levels. continue transitional of large during last in aside, XXXX half points year. a Communications basis year-to-date margin improvement improvement

Third Once compared X.X% $XXX EBITDA X.X% Power project & revenue quarter million quarter. $XX segment Generation execution compared of million was was with again, year. and last approximately revenue year. Industrial Adjusted XXXX the last or with group performance during the had strong million $X

in in XXXX, two equity item guidance On a approximately backlog expectation segment. secured to of equity now included growth recorded XXXX increased this to income. Waha proportionate level. are we the statement. quarter To which annual XXXX this $XX have We on giving line have record project million ownership Other sequential in million in our are earnings generating go-forward is investment yet income in in the related in quarter, the $X unconsolidated this annual and quarter In the service anticipate equity our approximately strong in segment, confidence another in income. excited report million summarize, affiliates' income our segment fourth and the third will and third during XXXX and we sizable basis, This we $XXX pipelines, during that a had generate to earnings increase awards also us performance additional of new both

derived percentage quarter record from for home top wireless third XX% oil were activity approximately affiliates to the install as gas and third approximately AT&T revenue, level projects; was wireline Our XX%, of largest on and services, and XX multiple customers X%. it were: X%. quarter, was and are reflecting the revenue, project services of On while giving Transfer a service independently is corporate note Enterprise And Products three that AT&T these revenue. was managed separate organization, offerings, totaled us corporate a our approximately that under these important the XX% universe. offerings falling combined budgeted within within to basis, umbrella, that diversification of Partners Energy total

quarter to comprised and construction reflects Energy large quarter Comcast our comprising XXXX, projects American period activity. XX%. Iberdrola were in Duke Energy, ended revenue and And backlog billion And approximately Electric compared at We Diamond current last project approximately Individual billion X%. each were NextEra of gas Agreements the $X this at year. and Power each with with at the Service Apache of mix Group, same level X%. third XX% Corporation Pipeline, Master oil the $X.X

backlog As year-end sequentially timing, gas lower be at & activity. each point project to exceed oil theme said gas expected, large and a project, level. single contracts will consider which Oil confident large burn-off year-end, and to we we will burn XXXX the backlog in into come award important $X.X we Continuing announced backlog that last total segment lumpy, and large only backlog due were new in have oil time. off remain a we that year-end for Gas quarterly years, awards large was be month our contracts as backlog our it's awarded quarter tend And, highly large XXXX the of to amounts of our project and as billion at reflected that

in recent in XXXX for highlights year the have a gas future and we believe backlog activity we U.S. significant over XXXX expected Communications In secured our awards sequential that third are our consecutive $X will in segment, Power And, our testament Communications $X thesis, during in have the billion include fiber with with years. Backlog the long-haul demand backlog, year-end oil backlog drive month backlog billion. the continue in the amount our current mark segment that reflected ramp we segments. several Generation services for Gas in than As of will of increases quarter XXXX and multi-year of repeatedly, cycle this quarter less deployment third as exceeding to our project Oil project in currently as activity area, half will we our indicated a beyond & midst amount. XX quarters, to third

multiple release Lastly, quarter that exceeding $X $X growth backlog the over year-over-year XXXX we fourth as our level to by billion, anticipate our across indicated a activity record of third the have current during year-end across our experienced from new segments. backlog with significant XXXX quarter level grow we yesterday, project award all and segments billion expected will XXXX

for below to level third for Regarding than compared quarter of other capital of due revenue, level expense third areas usage the third the $XX period X.X% financing of working increases amortization revenue and to of statement for $XX.X XXXX million related XXXX quarter rate period the with EBITDA and the same higher was X.X% was due line, or year. last same of expense the Interest the or income last approximately compared revenue, to quarter slightly higher of to million depreciation X.X% primarily X.X% our revenue levels. year, This to record revenue year last revenue. was interest of decrease

our cover and Now, I will cash flow structure. capital liquidity

have bank plus with senior an group. We as long-term facility, $XXX our approximately we and liquidity, the significant have quarter availability no maturities, capital rates and ample previously credit structure excellent third defined noted, our with exit we solid, cash of and under As low near-term interest secured is million. supportive

of in a ordinary revenue, during levels gas quarter. third large decreased change we we record levels debt, resolve in at quarter, with third as of our debt including associated million requirements our We outstanding, XX%, which and defined receivable the course sales the capital XX these third by net total fourth to quarter million despite approximately sequentially less project shape $XX oil in DSOs, XXXX to achieved sequential or business working cash, $XXX days' days. accounts expect During excellent activity, increase the quarter related with or XXXX our orders

quarterly DSO our based retainage and with timing views, project and previous fluctuate the As range a reminder, our remains DSOs in on target typically mid payments, high-XXs. consistent to

to by ratio XXXX Our and X net financial remain reduction trailing defined We EBITDA, leverage ratio, our expect XXXX third divided affording during experienced adjusted quarter similar amount book the at book net quarter debt was that us a as sizeable XXXX X.X quarter times. the leverage year-end XX-month under third flexibility. times, anticipate debt levels fourth will

visibility to XXXX a project $X.X confidence we revenue equipment based full gas asset spending and expectation, our oil multi-year large by level XXXX to CapEx for year reflects we anticipate our activity. disposals, outlook of of as million on regard on $XXX capital of $XX million our procured continued capital under increasing net CapEx, cash to defined our are of million full to our CapEx This leases. XXXX equipment, $XXX approximate guidance expectation cycle annual Regarding and billion. With year continue

will generate approximate House XX%, or income annual share our revenue proposal, EBITDA million per million XXXX taken of and $X.XX. rate million annual Government by all difference bill approximate revenue. rate depreciation to will approximate and significant that We does compensation. believe X% cash or the of per This net net full by of currently earnings $X.XX $XXX adjusted interest incremental tax be may expectation diluted this we share-based are reform to XXXX initial adjusted enacted. to actions increasing expense potential tax tax that that the of our with and We We or tax would items, review interest adjusted reform. U.S. will XX% income related were and expectation share bill of and our any effect flow, approximate impact not expectation if attributable by yesterday's Based tax on X% anticipate we benefits the XXXX approximate including reflect this due GAAP estimated year potential We XX% amortization annual earnings $XXX that annual our estimate $XX $X.X non-controlling our $XX expense to year also income our adjusted revenue of will income annual million million. of will to full annual XXXX estimate currently

our for count the no shares share for Lastly, quarter annual XXXX million repurchase about period. and this And expectation guidance for fourth shares is XX.X diluted share assumes XX.X the million earnings XXXX activity.

Turning to or $X.X estimate that currently Fourth EBITDA quarter approximate fourth guidance, XXXX to revenue. $XXX is million quarter adjusted will XXXX X.X% approximate billion. quarter we fourth revenue of estimated

estimated diluted winter increase guidance tends quarter XXXX holidays, normal our level. In to Fourth productivity. results we combination adjusted summary, third record share. proud and to are to quarter pleased levels seasonality reduce XXXX the Lastly, which, revenue is yet trends, of guidance year our earnings fourth $X.XX approximate of the quarter full another to weather due per share to incorporates and per and expectation

strong end our And opportunities have years. We multiple advantage remarks. And and to it in across visible our our of turn capital us Q&A This structure for our markets the I'll shape, excellent the for operator well-positioned that back the various opportunities markets optimism concludes us. prepared take afford to leaving support portion. is now,

Operator

Thank you, to Noelle Dilts Stifel. sir. we'll go And with first

Noelle Christine Dilts

good a morning. It Good a congratulations exciting on Thanks. quarter. going on. like things sounds are And lot there of

José Ramón Mas

Noelle. Thank you,

Noelle Christine Dilts

And Rover? sort that So, relative like seeing think profile quarter profile full to XXXX, these can you're if that terms the Gas, of what just are of capacity overall most starting about in of you approaching you on the and billion Oil structure, pricing, tend to the perhaps, with in & also, looks construction new of the some larger just cost-reimbursable? the touch it contract utilization $X.X these could give not So, us the return jobs be job I'm on will be mistaken, this almost industry how of margin of to jobs mix pipeline not given issue horizon? on thoughts just kind in

José Ramón Mas

Sure. Yeah.

a talking a been the healthy. structure about contract that and seen, improvements in I time from for now a we've well Obviously, that the both what think seen industry, been market very long over we've seeing year. pricing a we've is the perspective, we've So, perspective

don't & the think course look We particular. I that think I Again, in our one Again, of third been the anomaly. that of demonstrated contract for in Oil brought over you last somewhat we one think, lot we quarters, where had that's an at margins. cost-reimbursable quarter, the of our few in when results business. our particular it's us, sticks. especially work A issue had Gas down

exit would Gas we that a to next what our move more we as & on get and So, to on job business. to consider our back Oil we base of expect normalized slew margin projects,

any in bit reimbursable If back you for the that kind business to and that's perform work favorable how of to a our margin we've the the guidance over the about. we how projects mid-XX% think XX%. little range, that then, that given And relative margin kind the get right out. close-outs. out of last probably maybe year can to close closer or think margin better projects around And without quarter, We so, that's were

Noelle Christine Dilts

side, a the the XXXX? us half-weighted it. Is earlier? FirstNet? any ramp or does on to wireline, in then, with the to work in on both back telecomm how year this you activity, could also construction impressive or And going Got then, and the strong obviously backlog of And timing wireless award a help be think recent more of awards wireline, really we can see on particularly include activity, about

José Ramón Mas

Yeah.

lot it's out We of don't the ever opportunity across level. seeing lot get the still happening, levels business So, activity for do gates A happened entire a ramp. full so a further and, of XXXX that recently remember exciting. have of We there's we're way, awards seeing will I by incredibly think don't growth. these still that sector. in today at are that the the kind of

tremendous And time. wireline back-end legs. it it's it's it I for the then XXXX heavier a particular, be the to run than I to think really business, think do in I think in So, an as and it peak is half, incredible about think goes. starts during as long and I going XXXX. It's the ramps I first XXXX think got in

at the we'll think time, then laid stronger in see much somewhat FirstNet in same still progressing think I XG associated are it XG and a but are the plans plans both wireless in will be the do think heavier XG, and of is lot on On think the be with XXXX, similar. it's activity and XXXX, of the about than you in I When XXXX being I back-end somewhat side, that also out. just how the business year, it'll implemented. being

Noelle Christine Dilts

Thanks so much.

José Ramón Mas

Noelle. you, Thank

Operator

take next Matt Duncan with And from question our we'll Stephens.

Matt Duncan

Congrats on guys. morning, quarter. Good another great Hey.

José Ramón Mas

Thank Good you, Matt. morning.

Matt Duncan

number prepared So, of wins comments. large your a in José, you ran through

you all of not, stuff the curious, and that ran what's so backlog through, Just in what's far?

José Ramón Mas

So, in it I would is of that most have not the that is an say we backlog. XX-month we Part backlog. of run anomaly

about So, our it's number only XX-month. there, months, backlog, as about XX we awards. talked A like the talk of some fiber those projects we that beyond go will

include So the months going we're to a on only backlog in XX go-forward basis.

exception all it the the of little on we pretty a with that else not backlog, some bit awards but not same fiber at So transmission But everything side, will is all, in of already not much in backlog. time. some, enter backlog had the and

Matt Duncan

So, is it fair to...

José Ramón Mas

As the of the end third of quarter.

Matt Duncan

Okay.

number be the award you're that's I in billion-plus So, feels at of backlog you year-end, that me more you've XQ the when oil mean, fourth reasonable number to sort were like that you a fair large where given where the $X backlog is pointing billion. had that say it here Is to like quarter? in think and $X.X with wins say going it gas, a in that levels to and

José Ramón Mas

much the how we to going it's on depend next months. being performed XX in know, view You

it be definitely will think billion. above I $X

over And specific we next it how why up months. that of where ends I around think number. happens probably that's billion, XX give depending much actually didn't be it a could the $X.X more on activity approaching

Matt Duncan

billion Is anything relative the Is And XXXX? you of project? Rover? at a that you as gas us XXXX? you thing, say that oil help last that the you the $X.X can on look great. about there Rover tell Could it Okay. anything us the an into and give timing of would timing on did can to little had project be maybe win? else to project what carry similar can to perspective there you that Just we just project Is XXXX

José Ramón Mas

very similar. would be It Yeah.

So, clean-up would is project like especially a expect Rover, expect have project. into and early things We an our Rover project. on that same spill-over predominantly we XXXX XXXX to project. predominantly the and probably on on, would be We'll some XXXX that, thing on XXXX

Matt Duncan

Okay. Great. Thanks, José.

José Ramón Mas

you. Thank

Operator

our with we'll next question KeyBanc Markets. And from Tahira Capital Afzal take

Tahira Afzal

on Congrats José. another Hi, quarter. good

José Ramón Mas

you, Thank Tahira.

Tahira Afzal

So, José, basis, growth type on years the when you a build-out, growth annual XX% I whole rates. to XG of saw look back compounded for four rate

fiber at and XG you look the If could rates XXXX side, is you potentially see of that kind into the the plus?

José Ramón Mas

Yes.

Tahira Afzal

was clear. That Okay. pretty

José Ramón Mas

Yeah. I and very is double business, growth XXXX, I all-in, in next a see growth think, definitely installation should our see in in beyond. year it some strong and we because the to do of lot slowdown year. that don't XXXX in be see we digits would side of XXXX. so And think that Communications significantly I I accelerates in close XXXX it but growth expect ramping think again, we really it a business grow to

Tahira Afzal

it. Got

backlog we think just be or out on line? Okay. more we top with double-digit. into all extrapolate we you will little should provided And, in based into ending year, about guidance conservative something top for XXXX? build José, your you How should know, backlog this the in how up you similar the line the Does a it the be

José Ramón Mas

going The end way we're up do we'd and, we're be about we about pipeline more to going doing at came conservative. thinking now billion. thinking is, business to a year We billion. into $X.X this look probably $X.X bit We're again, our little

billion, we And the about XXXX, somewhat we do pipeline $X.X Some time tell. this we pass-through, our year. billion. over revenue will know of think are $X I as can on levels so consider can accelerated think beat we that Whether we

kind growth growing business, of XXXX, we're it that see think else I not going everything so of growth although So, for nicely. the the to in company significant overall tempers is

were to conservative up So, if that year is in would probably, a view we we what mid-single next taking probably of we're be thinking. be I think digits today somewhere going is

Tahira Afzal

Awesome. Thank José. you very much,

José Ramón Mas

Tahira. you, Thank

Operator

And we'll B. FBR. take Riley our next question from Alex Rygiel with

Alex J. Rygiel

Thank my question José. quarter, and great taking you for

José Ramón Mas

you, morning. Alex. Thank Good

Alex J. Rygiel

projects these FERC the proceed see you address inside could you that how you backlog the could of some and First, through approval? think

José Ramón Mas

concerned. for would said members. time, knew ultimately, appoint we're that, very a FERC not its new long We've We

FERC has full quorum. I think now

FERC projects a of the So, make and of think is think next years. we think will an We I it's amount as yesterday, activity that enormous create it favorable completely FERC is active. which over few to going environment now out,

Alex J. Rygiel

secondly, in in interests million generation a the bit your about Obviously, the about in that great third that guidance more it quarter? little at you cash quarter. level. with repurchase buyback time $XXX us tie generation get of of provide to this place. comments fourth cash then, share And then Can and expand a on aggressive? And you've Is in got

George L. Pita

It's Alex. George. Hey,

view, In we We terms our we'd third the million. quarter what quarter debt of $XXX $XXX we thought we at indicated reduced in close similar by quarter. debt million-plus, third a rate in levels the to to did reduce fourth

reduction sizeable growth have quarter, in. retainage lower So, stuff range. we'll in normal revenue fourth fourth to and That debt the payments the in that in have in and should see year be significant operations flow cash a $XXX similar then us with from seasonality that's over quarter. built the going that the puts million you And all

José Ramón Mas

We significant did we year. think affect that So, it would we which the repurchase. address working growth share would When about knew the XXXX, in have that Alex, I'll knew capital, we the year. earlier during

relative to a price had. we stock think third the with the saw we've I of obviously quarter We're to where and we that continue. in is performance expect big disappointed that our it turnaround

somewhat revenue Our significantly we've has over guidance price increased EBITDA even and flattish, though both been the year. stock

be a coming how at harder interesting reacts. looking our see the we're price now discussion months something and lot think I for it's on to stock So, it'll over

Alex J. Rygiel

very Thank much. you

José Ramón Mas

Alex. Thanks,

Operator

Fleming from our And we'll Alan Citi. next take with question

Alan Fleming

guys. morning, Good Hi.

José Ramón Mas

Morning, Alan.

Alan Fleming

guiding XX% revenue that margin has to the you're José, seen. the on highest company about EBITDA

in think past, being you've a talked EBITDA type potentially about time. I business So, over the XX%

confidence or a three So, of can maybe about that the get you normative talk think is next for operating four maybe of your levels you that if in business your point towards you XX% than kind more margin. And higher good peak do year? XXXX, can EBITDA starting XX% not lines is all

José Ramón Mas

we'd other consistent thought to we we're and today, be started the across the relative with things, pretty Sure. exception pipeline, Couple of where you look areas. at all where we year we if are where the

and in We solid both growth, business Gen we've improvements this margin to those see continue markets going we're Transmission to that in believe our Power year. had

margin grow. over helps which to the that the business, especially time, profile expect to continue whole as those and businesses mix and of We obviously accelerate

I Our Communications last some we the lots business, them improve we that course the what look definitely they in as XXXX than think year. And over reverses of what weaker frankly, years. will for right, side, pipeline of think margins expected significantly quite be I did year reasons, And think coming to well. now and this on

differently think lot don't we much to that, margins. XX% definitely guide the improve, us are do a help where we is And different definitely but to So, that. going probably better these wouldn't today, peak than and than XXXX, into our opportunity our businesses grow for mix. With of we it'll exists as the continue

us and what future over-perform So, the to again, holds are we're to a for where continue we our ability really as and out-perform. business, about excited

Alan Fleming

switching Obviously, of noise a in and helpful, was in installation you? DTV there of can business. maybe traditional losses the a little That's assess lot the quarter the bit, business subscriber about you future for gears the

quite this time. You a for good have it's you, in there. kind long been future of The has for cash-generative diversification but a mixed I for business of been business what's the guys this know MasTec?

see mixed. DTV? the has you there think efforts do Your this like of about things some been in secular headwinds or How you

José Ramón Mas

Sure.

love I the business. think I

think I it's excellent an business.

growth particular, lot had at what in that acquisition we was DIRECTV A and do about the of AT&T from with time U-verse think to with happening of lot XXXX. that customers. you a to had If XXXX

up of So, were XX%. north from revenues to XXXX, XXXX

we for at we're actually are look slightly we XXXX, in XXXX. were above where you where If

time, an homes, customer-touching and warehouses have trucks make potential the just we of brings, of given amazing of So We we've business said flat that see kind long the go-forward XXXX. as amazing amount the basis. the in an a that and in that relatively products. have across and softness fulfillment, visits were amount we bit with the to like in business business of business expect made back a has the country, ability little where to we to value with do gains think we're a we for significant number on we of a XXXX, But the

customers we So, and we diversification in to into were and to went down, into be that we they kind a we'll made, home, continue we the in that lot products really with lot believe to that. at for. a of well to of of well. we work we home they then a the can Unfortunately, And diversification sell other doing at we ability But as do assets some continue hard continue efforts that there's offer expand slowed while continue help for working space. and to had and that it owned that who the security bullish can fulfill and on to what do very the

So, mixed we'll And in in think model, success think the good we diversification. we've you're diversification, a have but has a absolutely over grown right with lot on we've over got DIRECTV. obviously time, we success saying had which years of

Alan Fleming

much. Thank you very

José Ramón Mas

you. Thank

Operator

Suisse. from I the And utilization characterize LLC communications then, Credit secured, a utilization your Gas is, you the bookings questions, to about think how business, that How given side? this Jamie issues we'll potential And year the know oil still in Communications Nice on given My into talked past or do how in and guess L. going and my gas? improving margins & Good we more Oil XXXX Because about the this on year. (USA) - Jamie would question I Credit last do some constraints to story. we booking XXXX like side. take about just margin somewhat of when Thanks. capacity on just I strength XXXX, and awards it's sit the José. potential proved they're hesitant Cook on a ability talk feel like the they feel Communications in we of investors, XXXX XXXX, wrong still morning. with really to your the I work book And book and you communications the Cook is our more Securities One, while on Suisse oil you on them versus question your you Hi. over question gas, quarter. couple work, today? where second next think

José Ramón Mas

Okay.

win there; billion will We work to questions try of on said oil Oil prepared the continue billion. into in and We'll the we as doing and Gas gas lots up comments. $X.X do revenues. side, So to definitely we'd end in came throughout $X.X year, thinking we our & book the year

through on side our a The book-and-burn side shifting, the has of component will have don't and still what we we the resources throughout lot of a and have be going to opportunities shale can effectively. and always so, It of So, that's are book-and-burn. there's And improved to we're there. We manage we market we that business XXXX. huge do is available in and do significantly terms for stretch there. where see us what can what

feel and really sit So, that. our we on improve about ability going where into good to that in XXXX we

there's it's significant be for and coming. it two that. On the to to speed we're that wireless can real. way country XG believe be and is anything in to proven for small communications going it multiple no think a businesses, a considerable you itself it's on carriers. XXXX not XG infrastructure of about is impact That's spend and the throughout I which, can it need beneficiary to is there's construction cells, going side, think necessarily in be to going there One we're The point is time. have you awesome a in in be market, the wireless densification, right? build-outs wireless big not to the event macros, get in be infrastructure, over

in I are you growth that story that we'll intact speeds is there. believe improve, MasTec to And from benefit so benefit big going think if continue So, that. to wireless in will way, again,

side, can wireline over fiber for of book the don't happen question awards, anybody We've going to the past, that of ability to the worked know work. billion years. we our few the I customers primarily in hadn't for won course over how On work $X for that's next

those growth by today. are business So versus significant create in vis-à-vis to our awards, we where themselves, going are

out, that. to to continue And, again, So, think beneficiary come at a we'll beginning lot again, that. big of we're that There's we're going of we that's win of work the be continue and super-excited. share, our to a phases

as two great So L. Securities (USA) issue... LLC in on to great - communication the them. feel margins utilization the we're it about shape Jamie Suisse Sorry, just Credit Cook and relates businesses, those side,

José Ramón Mas

improvement the we're would quicker So today. going we right? relative talking think get ramp, going are ramping. significant they to it's to know be I better time. margins The I about to know But over in we ramp, all be about that do don't get better the So year think next margins we we be a I back goes that the will in as we Cook the the Credit I And get Thanks. really (USA) that's of when then, Securities end I up. probably - expenses ramp as year starts. Jamie strong business some LLC and XXXX. on, L. a because by be think where We'll I'll ramp Suisse think Okay. year it'll be have humming the queue the

José Ramón Mas

Jamie. Thanks,

Operator

with Chad next Dillard And to Deutsche Bank. we'll go

Chad Dillard

guys. morning, Good Hi.

José Ramón Mas

Morning, Chad.

Chad Dillard

& have a sounds billion It in $X XXXX? compares third you won margin just XXXX? quarter, you you margin backlog, the the your I like your in might after price improvement margins Gas work Can including to how whether see you Morning. wanted that actually and fixed could for Oil here of to mix that's and to speak some higher the understand

José Ramón Mas

Sure.

on is depends that We had on particular look we limited right? structure our it & in a XXXX, into contract how on upside projects it, business. So confident at Obviously, the very Oil the margins Gas went our really exist to we we so said good what solid, And That XXXX margins for earlier. well. going is like feel I generate be work really could doesn't our make. ability priced to XXXX, we as for

and a a XX% project with better think is said gets and range a to that range start really I to close-out. XX% it execution base consistently (XX:XX) on we've lot good based

we at how would that's it. So, look

XXXX, going thinking year. if the would do based and know hopefully execution So on that project to those we're about start over I'm course numbers around better of probably the than that I

Chad Dillard

you that that for in activity that of construction looking the bidding in and construction you a see in of pipelines compare ahead level pipelines level starting bidding saw can with you the are ahead activity XXXX XXXX Got it. just gas, for starting in And XXXX are year XXXX? oil in then,

José Ramón Mas

that be I was, about throw caveat better, last would business. wouldn't year, into This thinking book-and-burn a up business. again, I'd year over but out a even you in is we're say it's this out. a And year predominantly the until

single about to the a larger changed of a visibility, projects. the in a without I project last relative years maybe We two lot knowing So, ago. particular business years think saw has the two lot

to drop-off XXXX our There We projects feel it. about slated great a backlog the that in go fill are of that. We are we've think ability to in We got XXXX. continue continue to number or to market, over business, see time. shale the in to And in a continue that'll strong play we plays, in don't we some and out. both suggest. think that very think see a long-haul and the it's like We

be opportunities we in relates bigger it and they XXXX, help call, than those we Mexico. are XXXX also plays to Canada much further I to the about XXXX, on really important start as but beyond, grow and They We that think we us, us business. see which about as is are and talked think not today thinking significant opportunities, do will both

Chad Dillard

guys. Great. Thanks,

José Ramón Mas

Thank you.

Operator

And we'll Brent next go Thielman A. with to D. Davidson.

Brent Edward Thielman

Power in XX% the Thanks. Gen picking business on some it's looks next to of expectation is margin work where to turn be? Good business segments, into you're the the going X% up. a What's take for and year José, that indicative big morning. that other Maybe like the with business, this should

José Ramón Mas

where to been couple those a would that in had where going trends that we we that in believer guiding to I over those get last been to business jump has now time. don't few margins the ability for last versus we're in business; consistently feel Market big and think our we've trends, can go-forward quarters. hot on we better-than-historical a until We're always in probably We've do I excited. last great quarter. be in know and It positive the and consecutively revenues few that over was that a The about sit business obviously really really Very levels somewhat good we've averages right years. the years. in basis, over-performed business. the now, business, is a big see we over

Brent Edward Thielman

then, kind utility might for be agreement, segment, attached incremental of distribution this any And revenue what for that means the that? to Okay. flavor

José Ramón Mas

We're opportunity not timeframe. in for off that hopefully, it capabilities about more XXXX-XXXX ramp going to now; something start will significantly enhance us, to that will big take and details distribution and, give in our XXXX really

Brent Edward Thielman

right. All Thanks.

Operator

Adam Thalhimer with And we'll Thompson question take from next our Davis.

Adam Robert Thalhimer

Hey. Good morning, guys. quarter. Great

José Ramón Mas

Hey. Good morning, Adam.

Adam Robert Thalhimer

the the José, you the a maybe there, did potential see business revenue. line, guess to on question, Gen similar little to question Power you XXXX, last back the of over I top $XXX even higher. get million

José Ramón Mas

to there is a potential than XXXX. The Yeah. get higher lot it what was in

Adam Robert Thalhimer

In further XXXX down road? the or

Jos�� Ramón Mas

but XXXX. further even in definitely potentially road, the down Well,

Adam Robert Thalhimer

do this segment? hit Electrical Got active environment, backlog you bidding that transmission the for when it. could think then, And

José Ramón Mas

that and big hopeful months just work very much industry. could We're think, think I the before QX, so going there's everybody's for happen QX I change that question. in next backlog good sure, a nine in the think into be year-end. there's a going I to, it It's to But

for will right projects come. and and very I but little market think active going bit, to think is really, earlier that strong there's I delay really years happen to it's a that'll projects a now that be one

Adam Robert Thalhimer

Great. Thanks.

José Ramón Mas

Thanks, Adam.

Operator

And we'll Canaccord. with go next Burleson to Bobby

Robert Joseph Burleson

morning. Hey, good

José Ramón Mas

morning. Good

Robert Joseph Burleson

in of sounds it some curious, these like Just larger outstanding. of could following like up on awards look the and the transmission, projects margins XXXX beyond. what lot on Curious electrical a

José Ramón Mas

We to historically in the double-digit to those the shouldn't market our reason levels. there's historical is be goal, used at back low there, we we why return get said EBITDA range. least to We've to levels. no We that think and think

Robert Joseph Burleson

be That'd great.

José Ramón Mas

XXXX there we fully Whether not get I'm sure. not, in or

the I ramp. revenue but revenue there the better, depends obviously it gets I get think think XXXX to opportunity the as is on And improves, ramp quicker.

Robert Joseph Burleson

you of curious curious like, more size the coming, just projects. the then, a project activity, And there and total construction size farm you the guys wind There's great. for average revenue in that think is sounds it of Okay, lot on side.

José Ramón Mas

that think also business; single lot of bid and we're out bodes ways Tier fund tax time, Today, change lot question more of We're basis. difference active sign them well It's between, are contracting try find market. put the companies developers using farm more and packages I a seeing a to not over were contracts and services We're a of we're really and even a it. other together farm a be single kind of Historically, to know seeing in for in credits. on available trying X X who an many farms the put longer developers in wind tax which for by customers smaller one seeing and on you the seeing credits interesting obviously, a cases, the developers to period these wind like Tier ours. dependent wind

opportunities the of few over actually, really it's the so, the that positive solid. business and in the significant business the So the We for years; of size very again, a going years is see improvements out trend versus last size few us. next

Robert Joseph Burleson

Okay. Thank you.

José Ramón Mas

you. Thank

Operator

our from Baird. today Andy with Wittmann take final question we'll And

Andrew John Wittmann

Great. Thanks.

fruition be met of project those come permitting materiality to or to to have $X.X the Given move need to get that the I what and ahead, when just will to regulatory billion think Notice hurdles for file that to wondering you you full was Proceed. win,

José Ramón Mas

made they've progress. think We great

no trending really Nothing's on is think the on to XXXX. start our to relative so and timeframe well from early We everything job I changed far, so expect in side. concerns that expectation

Andrew John Wittmann

being the reimbursable then, You And conditions and construction? said was little a are Was job that guess, towards or portion, entire was pipeline I just broader a reimbursable to it reimbursable this marketplace. understand bit pipeline say? I a on was that then does there more wanted it about – and what job terms are of the seeing the but kind okay. the to it trend And and portion unusual, you in applicable of reimbursable

José Ramón Mas

that more of say that situation. I a I say and category. need the again, unique customer than was do very customer, would that So, of it it it a it. that this it, so under was with I'd fell willingness was not, a portion And, that our the relationship unique structure time, the based they and expectations that at time to had had, the the the award, on think

So, for day, us. do with unique. it lot again an of Again, excellent the margin. it's to us, had frankly, excellent we that through And it's chance revenue the The end a an despite quite without overall customers. of deal's at deal deal it we'd for having some do the again flows if

with don't in in So, it's see. do We any other happily or not in at something but something that it customers we've we that going have typically projects we would this the got entertain future. XXXX point, on

Andrew John Wittmann

Yeah. of do guys are That that prime the was EPC plant conversation, right bit you have could The about is final are here. biomass a the think you give one? one a one outset sense just you you because on about you we talked little on hoping on lot I seen call Maybe that I'm on all. just I that terms of sense. some more the question full the a at what haven't Is you at makes risk don't Are or but I that, think that sub? specifically? biomass. a wrong (XX:XX) a

José Ramón Mas

we've success. also gas-powered We've Yeah. generation some with done some done historically and

risk time. nice awhile. this This of we've good. is project hard. a got demonstrate We we're excited excited And, the our business that. our EPC, and efforts a we're is I returns. This Power job fixed think we've in project that we've to a profile working is throughout our for and, over period full So, very add part following on taking not year. so it, that in price working to offering on resume hopefully, is was risk diversification on the Obviously, the we'll on been again, think been to of Gen it It performance solid work long moderate really the a of based

Andrew John Wittmann

a good Have much. very day. you Thank Great.

José Ramón Mas

you. Thank

Operator

And to turn at additional I'd Mas things remarks. any this back José closing to like or for time,

José Ramón Mas

call Just third our couple we Thank forward on like and today in call you. quarter to year-end thank look participating to updating months. our everybody a on you for

Operator

conference. that you And participation. for today's Thank does your you. Thank conclude

now may disconnect. You

J. Marc Lewis	MasTec, Inc.
José Ramón Mas	MasTec, Inc.
George L. Pita	MasTec, Inc.
Noelle Christine Dilts	Stifel, Nicolaus & Co., Inc.
Matt Duncan	Stephens, Inc.
Tahira Afzal	KeyBanc Capital Markets, Inc.
Alex J. Rygiel	B. Riley FBR, Inc.
Alan Fleming	Citigroup Global Markets, Inc.
Jamie L. Cook	Credit Suisse Securities (NYSE:USA) LLC
Chad Dillard	Deutsche Bank Securities, Inc.
Brent Edward Thielman	D. A. Davidson & Co.
Adam Robert Thalhimer	Thompson Davis & Co., Inc.
Robert Joseph Burleson	Canaccord Genuity, Inc.
Andrew John Wittmann	Robert W. Baird & Co., Inc.

MasTec (MTZ) 3 Nov 172017 Q3 Earnings call transcript