MTZ - Earnings call transcript Q1 2018

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Operator

Welcome to MasTec's First Quarter 2018 Earnings Conference Call initially broadcast on May 1, 2018.

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

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

in financial our XX-Ks or PowerPoint to lot period had thinks Today, will of most found a talk and opening great our the A by addition, remarks financial our have measures to about We last a use important mastec.com. conference our In may on CFO. Investors will located by José another we today. and reconciled discussion call call. comments from non-GAAP be financial Executive located a and us XX by call and and Pita, of website this about we can the George Q&A release, earnings expect followed any followed be quarter non-GAAP GAAP minutes. in of the measure these be Mas, with in The measures and our CEO; Vice posted News to George. President format reconciliation presentation and certain José The analysis review not press comparable and we Qs at section in of releases, the

it pass José. José? I So over just to

José Ramón Mas

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

sequential quarter First, was was million, year's increase cash some million, first $X.X billion approximately we and and share nearly at XX% of of by quarter approximately the over $XXX year was proud quarter. backlog EBITDA guidance XX%. Adjusted another first EBITDA an operations our per very earnings and from guidance We million revenue million, $X,XXX $X.XX, our In for our first they expected. results were our quarter adjusted from approximately quarter better and EPS increase significantly end. summary, by We're were we flow $XX highlights. end last XX%, XX% by had was had $XXX exceeded guidance Revenue quarter. than excellent

In results, operational addition building. to financial is for our momentum our business

seeing backlog million of accelerating a every increase opportunities $XXX We of in one business are backlog across nearly of We growth had sequential our reportable all segments. our with segments.

Our to its Oil shale long-haul and services enjoy strong demand for related projects. Gas segment continues in and both

services. wireless Our speed related out fiber win carriers and both grow new higher rolling as continues are aggressively connectivity, support for and installation fiber opportunities, Internet to business for XG

related $XX Our guided they to and and continues a in wireless three-year increase significant services. network to XG we see as potential the T-Mobile over Sprint, announcement investments to business investment ramp, between recent to period. a of begin In FirstNet billion

year to We're we're for be we quarter performing significant Again, future XXXX our strong more we're of way performance growing on stages think about another opportunities had with we both the number excited us opportunities. Power and Generation beyond. well to and We we're expecting transmission record our well number in number MasTec RFP financially, in our projects first growing even of for front see growth opportunities coupled in a a the continue while to of in the with of business backlog XXXX with achieving and a segment, that.

like Now industry cover to specifics. some I'd

for $XXX was up storm the wireline XX% to million expect coupled companies to and and year-over-year we Nationwide revenue to performance over demand. to quarter $XXX quarter by continue million demand last restoration was was in increase and increase Puerto year, fiber in continue companies cable services Wireline from both revenue TV driven Our coming continued we XX% those business the see first strong deployment work projects with from for our the Rico. revenue for up continue strong telephone Communications years. expand versus in quarter. last The year's

what be activity. we Wireless at In aggressive to we beginning most are and wireless growth backlog fiber the expect of our in We the build incremental order cycles history. grown business, trend has will continue. that are continue that we one in believe seeing of to our

expecting and into XXXX XXXX year we're excellent an a be ramp While beyond. we wireless, expect more to for aggressive

years deployment expect loaded very to XG with We of be FirstNet and and strong to in come. XXXX back-end

spend recent deal it to said billion by be to a that and both if is their development expect I goes closes, levels with in $XX we increase If spend both years, compared plans industry. us announcement on spend three companies. T-Mobile's to earlier, considerable deal our significant While through, Sprint positive for over a the

for and versus Generation year. prior revenue quarter segment, million Moving to was the first $XX million our the Power in Industrial $XXX

as demonstrated Revenue in backlog into of in in we of very experiencing and $XX this We year's awarded should this end, backlog up verbally over XXXX two are in excellent be the segment $XXX will Transmission up job that was and look for sequentially improving year, over we a business we Post-quarter the by last growth to million Electrical in while our we last for large segment versus slightly over first did Transmission was transmission an as demand million, quarter We expecting strong were to services. of expect year backlog growth. a and XXXX. in our $XXX sequentially. our first a XXXX years executing in margins quarter. be quarter. performing million good second the million project Backlog $XXX strong We're forward expect go

record quarter $XXX $XXX first revenue million roughly X.X% Backlog segment for by comparable cost large and to compared $X.X level. project. of Gas quarter. year's first for the in EBITDA of sequentially the a levels. Our Gas pipeline billion, our million also impacted and last fourth were continue quarter in Oil be margins quarter to increased revenue had segment our to Oil Margins to reimbursable

in expect the for year. We quarters complete the margins and balance increase to be of to the project second considerably that substantially

services demand Our Oil and Gas its for from long-haul and shale segment enjoy strong, long-term both to continues activity.

To environment great a to expect off come. a in to for years recap, strong we're We have excellent and visibility start XXXX. very

the of is our strong backlog revenue future as We $X.XX. for million to to like of Our enjoying and this their thank we across hard $X.X excellent of and our earnings outlook MasTec and to XXXX take guidance for to more and billion, their opportunities XXXX commitment EBITDA sacrifices. increased I'd growth segments. XXXX to share opportunity is men women importantly, are per $XXX safety, their work all

our George? because to bullish excited Our most and asset so George turn future. their call that now our performance financial for I'm over of are people review. about our and the I'll it's important

George L. Pita

for XXXX liquidity results José including flow, off good financial proud start increase revenue, XXXX. earnings and I'll in summary, Thanks, adjusted strong to guidance well expectation and XXXX our diluted as to first per everyone. adjusted morning, are our as full-year diluted above initial EBITDA are earnings capital per expectations share, share. for and In quarter structure and guidance cash Today, our we cover expectation increased a

program us first repurchase remain sizable to over during million earnings importantly, These XXbX-X our XX-month not on X.X and share More slightly in multi-year $X.XX under of We have purchasing quarter and approximately X% programs by XXXX shares, total we base. accretive reflected program through are which April, bullish approximately and share Street we the share beyond. per opportunities infrastructure XXX,XXX XXXX April. growth million we and accretive approximately shares. on diluted appropriately year-to-date completed repurchased the shares a a basis. subsequently XXXX during in rate customers thus that then our We been potential believe run an during are we that our year-to-date X and million repurchased authorized total, XXXX, $X.XX additional purchases share another of give basis a In or growth $XXX approximately several repurchase initiating XXbX-X has

in directly website in Marc of adjusted I indicated big non-GAAP beginning Jobs of quarter, call, the would Act, about discussion at filings. and earnings the we a and to MasTec our talked or SEC that beneficiary and it both Even release and is like last found press indirectly. include reiterate details the Cuts on though Tax As Reconciliation our financial our of measures our be guidance will can EBITDA. results of non-GAAP adjusted and

rate approximate that XX.X% tax We our effect compared the GAAP adjusted adjusted XXXX of earnings will pre-tax tax for in to expect XXXX. and rate XX%

this to benefit, serve. of in indicated and recognition this we for impact. our the addition we as large capital statements of have as customers no first beyond end XXXX the rules of of made In had market direct expected, regarding more trends we and, tax our the support because Also, XXXX adopted providing quarter, new quarter markets in revenue incremental last in expectations expenditures GAAP material public even reform, favorable several

performance. Here first comments quarter a few XXXX summary are regarding our

and with Generation was increases the XXX% First Electrical a and and XX% which over across Power in quarter segment. organic, Transmission and of total strong Gas year, Communications, XXXX revenue of XX% $X.X the Oil billion grew Industrial last double-digit segments, increase,

excellent believe the total Communications, of second levels and of backlog and approximately our the well for grew in significant quarter record strength level our This quarter booking billion. was beyond. demand end First to backlog as million activity Industrial. We backlog segment second and Power of Gas markets our and and Generation $X.X consecutive record approximately sequentially Oil XXXX, evidence the XXXX marks backlog in XXXX as quarter we consecutive $XXX record

revenue, XXXX First $XX expectation. approximately $XXX.X approximately of above was X.X% million guidance million our adjusted quarter EBITDA or

share cost towards earlier. per X million, times and of And quarter, first large in as well during levels indicated X.X work guidance normal I liquidity. our XXXX million first capital as approximately expectation. impacted reflects both the leverage timing quarter $X.XX approximately quarter our the balance our higher certain per quarter minimally the in as XXXX the impact a the shares year, diluted quarterly the share and part we shares latter with per earnings at this Gas X First per due these invested the quarter book ample completion during level ended We Oil than ratio the as and projects working repurchased months. coming of $XX of long-haul We repurchased adjusted over of results share above to but share, a favorably of results, of $X.XX impact were will purchases million

working of As expect indicated during the the the which should full-year cash of year, from during last period. generate we second quarter, level we half to capital XXXX operations flow record normalize a

Now, me quarter some detail regarding results. first segment into get more let

First quarter an with period adjusted Gas margin revenue XXXX and approximately approximately to of XX% Oil million $XX compared million or X.X% last to revenue. at year the $XXX same EBITDA rate increased segment

This quarter completion to minimal adjusted XXXX. Gas our second the XXXX first and continued with basis. Oil XXXX restoration anticipate fourth the complete of quarter on rate the margin XX% revenue as leaving project similar and reimbursable activity substantial quarter segment XXXX, was of cost we in end performance XXXX margin primarily on increased is reflects First half of large approximately the second EBITDA of during project, quarter a pressure and a associated performance

XX.X% XXXX strong revenue with million to segment $XX the XX% adjusted year EBITDA period revenue. million or increased at approximately of to compared margin approximately Communications last First rate $XXX quarter same

rate our increases XXXX Communications these for restoration and EBITDA revenue by initial margin wireline, and adjusted services this were primary exceeding were increased segment factors expectation. quarter First services fiber the segment driven storm in performance

rate quarter revenue Electrical million X% last adjusted to increased revenue. segment approximately XX% period EBITDA approximately the Transmission or of XXXX at First $XXX margin year compared same with to $XX million

for large levels past, activity we the levels current this full-year project segment's revenue slightly with XXXX XXXX in future potential EBITDA activity. bidding XXXX noted anticipated as project of growth sizable to adjusted the have we and will is believe create exceed increased As

from increased revenue XX% quarter or segment and balance with XXX% coming organically this acquisitions. occurring the $XX growth approximately First XXXX and million Power Generation Industrial of approximately

renewable reflects adjusted this EBITDA was impact startups of have the overhead shifted margin delayed quarter. quarter wind First second the leverage on from some and negative rate levels revenue that X.X% of projects into

EBITDA XXXX mid-single-digit We continue adjusted this XXXX will show anticipate margin $XXX growth at a to million exceed segment annual sizable revenue and in rate. in could

from our this $X.X earnings from earnings, anticipate approximately First optimization. that we $XX XXXX million investment equity interest in operations segment, and generate quarter to will equity pipeline approximately in operations Other commercial we as was XXXX $XX benefit and million currently in the pipeline Waha million

and XX and basis, wireline budgeted the note total approximately falling summary was XX% giving Corporation will XX% the XX% within of Energy as XXXX I within Transfer restoration these affiliates the On comprised that for approximately approximately while their under EQT each a Georgia discuss to services corporate AT&T X%. revenue, managed Renewable Now of period, Comcast, all umbrella, quarter revenue. organization, of Power from wireless in three of X% first universe. offerings was independently percentage us largest our multiple totaled combined important these fiber install-to-home of primarily top is and work of and at service services, a Caribbean. offerings, Fluor AT&T projects. our were were that storm separate one consisting It derived were diversification customers revenue. are X%. corporate

a and quarter at quarterly This have of consecutive In well with consecutive quarter company contract first of during our sequentially quarter believe Wind, increased year testament reflects was backlog, the so Verizon service growth Buffalo amounts develop last market increased significant Fiber projects backlog tend project to wireless scale XXXX large certain level Gas XXXX in such of million total size our highlights of beyond. only a trend as related opportunities markets the backlog and for mix point of as and to were the are $X.X of strength XXXX At levels XXXX years, both be comprised level as of for new Oil our This first and FirstNet Generation $X.X comprised level North single services In $XXX Energy record we a or of increase and our period. and over and summary, our breadth as record XX% quarter the second Individual the revenue Power agreements infrastructure quarter million sizable over period large telecommunications we backlog Communications, sequential we quarter into record at second primarily Industrial. XG, project as activity a XX% initiatives master our end awards in our contracts backlog. and grew quarter creating NextEra, the time. $XXX billion, XXXX. of said That of One and to and Remember, demand multi-year each XX% end in approximately X%. growth Verizon to higher segment comprising summary, a fourth serves come at record the backlog billion, backlog strength lumpy there past Duke our the and a of of anticipate off opportunities. end indicated construction will continue approximately marks this in XX-month Communications note increase trend and the to first of all large and over was XXXX, Communications activity. as compared quarter backlog first same burn year. times backlog Inc.,

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

total ended is and book net noted, rates was less $X.XX capital billion As X.X our debt defined our no significant ratio structure near-term debt We of leverage previously we our have solid with quarter maturities. and with times. low long-term cash first quarter-end as

of markets opportunities financial million, clearly us. affords of liquidity we various of our us As take quarter full flexibility to approximately allowing advantage had growth the end $XXX

working towards levels gas we oil normal earlier, indicated we with and capital quarter as we projects first completion. of the ended work large project invested in higher As than

of accounts have these days, quarter above is to construction DSOs of well due amounts. stretched expanded to caused increase As which in XXXX the activity our retainage projects in outstanding XXXX has sales into stated in our has levels This XX first XXXX high-XXs. scope mid range target to delays, of excess days billings increased or DSO creating and receivable an cost

ordinary XXXX complete second expect usage and during DSO our levels our closer to projects process and order working expected these finalize XXXX during target customer to return we moderate we to change capital the As the is approval, of of course range. half

revenue second anticipate XXXX that to expected over capital, continue from impact of year-to-date repurchases, the in the period. share usage our XXXX full-year and well indicated anticipate our half funds we position We cash repurchase given end associated million Inclusive of and the in grow Reiterating normalization current debt year in levels other flow of level evaluate views to a with times. operations working we of XXXX expected generate be opportunities $XXX ratio approximately should XXXX to as we approximate record initiatives share will continually past, capital on operations use as return book the reduction. X strategic priorities, we've of and as the investment that leverage acquisitions the for

currently share million As open repurchase we reminder, remaining have $XX authorization. approximately in a

spending our $XX CapEx Regarding an quarter during procured additional in And cash cash CapEx we million of capital first on as equipment, purchased net under net leases. of the $XX we equipment equipment approximately in defined XXXX million disposals.

million expectation for net in period, also we acquire cash $XX the in CapEx leases. We incur equipment procured full-year will approximately capital and continue the to to expect million under $XXX we approximately XXXX $XXX million with that

adjusted guidance, to full-year approximately Moving approximately we now of with XXXX current revenue million. EBITDA of XXXX expect our billion $XXX $X.X

XXXX $X.XX full-year of of first full-year impact million approximately XXXX $X.XX, XX.X that prior million diluted approximate weighted accretive XXXX the million shares. increase, second, per shares summary, of our of per per X.X Inclusive share our adjusted well and our adjusted our average the quarter in share In through quarters expect third as beat average share to the which we an for repurchase approximating April, very of as guidance April of earnings for approximate will annual diluted XXXX X.X approximately similar or diluted XXXX the a prior with $X.XX expectation is year-to-date expect increased impact XX.X incorporate shares adjusted the count levels the balance million and repurchases. fourth share expectation expectation. versus weighted to We both count share share also equates X% to

again April $X.XX expense annualization estimate increase revenue, project long-haul rate long-haul will interest amortization the that over capital approximate approximate tax and regarding Our adjusted This and a of We due activity. XXXX. incorporates planned with reflecting XX% on current tax expectation Also, XXXX income as million, quarter XX.X% of the of substantial XXXX impact currently large $X.X year-to-date estimate per revenue rate newly down earlier full-year reform, $XX EBITDA of upon will XXXX adjusted construction as XXXX adjusted now a or adjusted earnings anticipate to XXXX second second and We will of share large XXXX tax XX.X% as a full-year at quarter well dollar expense XXXX billion currently primarily ramp depreciation an full-year $XXX approximately share. of from with a of income in project. revenue approximately enacted diluted approximate the XXXX expenditures, million we of completion anticipate for is X% our repurchases. expanded today and the levels GAAP I M&A touched XXXX

Based rate second estimated XXXX some growth on that current that slightly based half currently color, growth quarter level. slightly current for XXXX guidance, of rate terms XXXX we math revenue that on third half of exceed XXXX second will timing, timing performance indicates expect of calls a project color on our revenue X%. below our the expected over XXXX additional our our In expectation the

to second rate, on project XXXX our expectation EBITDA the that rate seasonality, guidance In in be our on XXXX for math our adjusted second are level. exceed half the position a raise margin Regarding margin start pleased expectation. XXXX XXXX that below will timing slightly currently we based rate that half estimated third and strong quarter we current adjusted guidance had expect indicates XX%. XXXX EBITDA adjusted current EBITDA of Based calls to and our our summary, XXXX slightly margin to

afford As importantly, multi-year future accelerate operator our remarks. initiatives Operator? as expand And growth infrastructure our prepared XXXX Q&A. concludes to opportunities turn for we the strongly We'll into beyond. now markets the it believe and that us in back and

Operator

you. Thank

from We Thompson with question Adam go Davis. our will first Thalhimer Please ahead. take

Adam Robert Thalhimer

wireline those wanted been Are quarters about projects I question to substantially wireline José, talking you've side. underway? First the ask several large the on – now for about now.

José Ramón Mas

Good morning, Adam.

they've projects seen ramp think think I full started, to So of date. effect the I those you've don't

we're doing in projects. lot work still preliminary awarded So of we many areas a where of those were

ramp. we're think a going I to So see

all QX, As XXXX see way in activity we're develops QX, it XXXX. increased see to into in the going we'll we'll in see QX, it

to I the of getting So frankly, but think, it starting really it's quite you're just started. see beginning

Adam Robert Thalhimer

a that color Oil what on QX? in chance the if more then you in to little curious can and shales? And there's us any grow Gas, give seeing I'm you And can backlog in continue you're

José Ramón Mas

right. question, good a It's

big in We I get well big which wouldn't think in backlog have backlog eat level again. which it project $XXX did in backlog we into we about a to like in of project, that probably We smaller large backlog, we in our perspective, starting backlog, QX, work in another a were win nature. lot then increases so were backlog the we we'll QX, historically had that from We're QX, projects. growth our awards typically off from came we a to after expect done. million very peak up fairly we've dramatically

I business going trend how works. is think that's to of continue that that kind

where and time started QX in then backlog building assume QX on happen into going we versus expect in we in little would if and So, which QX. start then of QX XXXX, for I are will again it drop time QX, kind was our to we a that large on get on project bit

Adam Robert Thalhimer

Okay. Thanks.

José Ramón Mas

Thanks, Adam.

Operator

Fleming Alan We with question our Please will next ahead. Citi. from take go

Alan Fleming

morning, guys. Good Hi.

José Ramón Mas

Morning, Alan.

Alan Fleming

half you communication the XX% talked you basis on quarterly here there, facing instead start-up – about it's in long cost had I I margin. and a double-digit mean, first margins I time. some you seen highest maybe a think we've the can did on José, start in

anything out there reason the continues any this there as think know, level mentioned to forward but anything work, the to revenue be second ramp half out? else there? So, at year? you'd can't is into call kind I And some you'd going is call margins that you of storm the of

José Ramón Mas

You look know predominantly those XXXX, basis on storm don't quarter. have to with crews. points based XXX wasn't normalizing. other impact we're basis named so generate probably we do we we I margins positive XXX in in We get It from margin, customers think probably been by margins doing quarter, we incremental a was quarter, throughout. as were the $XX points storm impacted revenue QX obviously a at to because But see work it and going our somewhat storm. impact would somewhat XXX-basis-point to same represented of all Obviously the for XX% $XX the had million million, one which about of a was the

I think which Market's on We've playing of XX%. full-year on full-year in – a our about being about out was target north XX%, talked approached in well. historically really into a we've XXs, kind the the past of basis. back for XXXX

course A see Backlog early way very got about. was the we're question into really – the Unfortunately, of fantastic quarters. numbers costs the going lot late we're some it's a that some couple but question things was all XXXX, have obviously wind we are of with which lot by there next about that of that going around We excited our markets We've is got think our Communications. that sails XXXX, a ramp. the to in what's and to $XXX that I behind excited we have We'll will up have start-up until coming. wireless don't million of over Communications. continue backlog no we driven – activity the growth there's we're of currently go up shaping no of But through I that run. an think are

Alan Fleming

guidance you're Obviously then That's year XX% margin. very low that on is starting Oil the the helpful. and EBITDA And of your a still there X%? maybe my implies low follow-up if year Can reach margin you for at steep ramp. Gas

to impact you starting your get project mentioned in You How you in new construction quantify the to think here. starts ramp? your backlog of – work impact reimbursable those the work you levels an as cost can can much do on XQ big from and still

José Ramón Mas

we the The first quarter a basis on cost was impact margins. So the do, points in on couple reimbursable Alan. also hundred

in would been have margins business. So and Oil basis hundred a points couple better Gas our

We a in grow. margins which throughout got is still Gas. think higher We started that cost at new the I with margins achievable to year finish, project, it's little lower We're full-year continue here margins. that year, XX% and we in, other shooting lot significant tailed But bit start cost up. those margin think where kicks off in as because we of in Oil work the as will margins we'll new reimbursable expect where for XX% margins QX, to and unlike range a last from off. of reimbursable we're Rover think we especially work that and we a ramp versus the by think of we've end project kind XXXX and we'll projects see the go early. But still our will the margins kicking of affected the We have a

margins a have we be a the think gives the extremely lot about will which long-term of ability well from us over it's total and projects our talk last business I net at in been about margin performing our of a perspective, to year where we talk half, really confidence there. business to other business. that in our look think Rover if And important

Alan Fleming

Good Thank guys. luck. you,

José Ramón Mas

you. Thank

Operator

And we will ahead. Please Markets. Tahira KeyBanc our from go next Afzal with Capital take question

Tahira Afzal

quarter. to your congrats team good another José, and on you

José Ramón Mas

Tahira. you, Thank

Tahira Afzal

to you're telecom some ahead transition some It be fairly of and obviously sector, the coming year with XXXX Gas look seeming lot saying into in Canada a Oil based you had at of growth work Permian José, that just what if back, has and projects large. XXXX. seems maybe

it's able So XXXX all as maybe and a should growth it and side? your qualitatively organically you speaking, revenue see know out the into seems be XXXX look I should sectors number to maintain on growth mid-single-digit you early, to

José Ramón Mas

agree We with that.

Tahira Afzal

Got it.

telecom Okay. why into as are margins And and progress directionally is margins there as year. And You consequence? out well a we this should Gas some get as anniversarying a transmission better well. up EBITDA think reason should tough your Oil your year next and shouldn't utilization

José Ramón Mas

utilization up for pick a been of question last that's couple well No I businesses long about think as in part performed our story of time. the some over haven't years. of waiting to that and been for our it We've

seeing that today. we're think I

I margin to going think over – a we're We of think upside big our excited I to is start story. We're the demonstrate quarters. that's about that part think really that. coming the

So, across to including XXXX, in opportunity an we've your to board. Gas, all think Tahira, I Oil got the into and comments improvement with almost grow of in segments summary, the margin our

I think it XXXX going importantly into bodes XXXX of beyond. and really well for more and remaining us the part

Tahira Afzal

José. Okay. a lot, Thanks

José Ramón Mas

Thank you, Tahira.

Operator

with ahead. comes Noelle from question Dilts Stifel. Please go next Our

Noelle Christine Dilts

Hi, quarter. Good morning and thanks. nice a congrats on

José Ramón Mas

Noelle. Thanks,

Noelle Christine Dilts

in could and in you gas So, terms and them profile meaningfully and any both you're labor seeing kind you and the you telecom, markets particular that where what of there resources, just on the also pricing oil growth in And seeing Are could tightness? on comment if touch points strong then you're given availability improve? terms? of are seeing just you're seeing of

José Ramón Mas

we've said, seen all the think right? work. to are higher dramatically saying I your resources think to it's and to utilization going helpful, of you the get uptick so available everybody's or I There's last that a based know us utilization significantly pricing, the the on we're it level, for I that can don't been a margins. extent work kind for to of With is plan amount because pricing about that out year-and-a-half we've when what So comes no environment. that busy. that tightening it question right, just pricing good relatively environment impacts is see Noelle,

have effect So and impact in really pricing, I think utilization. bigger you uptick will the is some but on natural

doing our that think everything of well across for all we're I So bodes segments. that

think I especially labor, in to XXXX. we're As shape, good in it relates

see Communications about XXXX of have we We in good trying think past ourselves a talked pressure. front we've of think and in We really is to that. done market to prepare labor the job in where some get going the

in we play doing good long-term short-term for of to on I and I company make and prepare work the ourselves going be sure think we're in So work And and to that future win. prepare a to to we'll staffed our appropriately lot to and on going well execute spot perform the than that's rather wait. to we've got a in and us initiatives today the ability for relative both think the us things

Noelle Christine Dilts

or projects accelerating around terms very these is the Okay, expand this $XXX you on talking the Could or give you're north the project seeing in maybe? great. And a then opportunities comment commented – could million? little just board of very transmission you opportunity? opportunities large second, a across bit transmission sense, after of generally approval the quarter. we Are in more award Is big you win kind after – bidding what this on market? us it And it on just of

José Ramón Mas

It's would So since we've we're it's an $XXX excited in us. in it the really the business on project. But project our a we've been so project, make not big a second was. million It's hundred won million, couple it it's which for transmission us, project. largest it, win probably for wish a exciting probably that we

being that we and is think about going I build that is that we size continue. time think There talking of bidding that's are starting to we're obviously to there a the projects today. a backlog. think environment been out long XXXX a where We see great. now year of lot We've

of for it few the bodes think the very of cycle years business. next I that well

I think out there's work a lot of transmission there.

I than our think we've in we're space historically both a what quite be been everybody We're a historical pretty from excited and back well. perspective larger to going in about get business. getting the to going levels to is margin revenue from that and probably frankly perspective share do

Noelle Christine Dilts

And that's you. helpful. Thank

José Ramón Mas

you, Thank Noelle.

Operator

Please go our Chad take ahead. with next Deutsche We'll question Dillard from Bank.

Chad Dillard

Hi. Good morning, guys.

José Ramón Mas

Chad. Morning,

Chad Dillard

do about story, Utica mainline versus the of midstream? the we contingencies into a I like how guess margin consideration have composition I it what's think like Oil And there and of mean say the and keep basins? year-over-year, what do those if you I that like take of backlog you will you look and think just what on be based So growing mean of let's it is story Marcellus Permian ultimate level potential, versus like? you more Permian ahead between just does mix in if in you can XXXX more and booked Gas, a you the

José Ramón Mas

answer happening So of say we still we've we XXXX got to do with. confidence work. into that talking yes, or there's because I'm the market. and we large out – We levels foreseeable with a backlog of similar in visibility and what's as into lot three go short came expect XXXX come think four is project future tremendous the for in the years, I as

as be very ourselves that see, projects out projects XXXX. year-out smaller in some augmented those us can going So as I get over lot year-in, big to doing, work a of far we to we're similar we're basis will on the think to what's a happening and by

project So to dollars of and the million one projects other large mid-sized we've lots small hundred be a of could got projects apiece. couple with mid-sized

great work long that that trend a nature long in an to in going business. We have in sight happening expect end the what's based this on to know I continue customers. like projects. discussions We're having about is don't visibility. lot lot We the the great line long-term cycle frankly XXXX, of long-haul future there's concerns know we're last. dialogues we how XXXX, of customers record, with to see and of market there. and projects the our XXXX projects the but There's a out in in sound broken a we lots with I and Quite of that about

So up this levels than year. we've time been counts today this rig we're from they've rigs or been higher The very think encouraged. probably as in XXX We last are high business. since activity are

everything workload And work. can. spot. the a away great again, position best can shales, doing turn considerable serve in in we is our it. where in And today we're I seeing we're having we're a we're there to incremental customers think So Quite we a as to as frankly, we are

we're business and the good legs and really opportunities for long-term tremendous that growth, in think excited and about. short has I it's something both

Chad Dillard

peak to you you Communications, switching about expect can you revenue your think rate? in contribution speak That's as of as comment how DIRECTV? also then contribution helpful. that FirstNet that can to if well And you wireline and on to expectations and over then And when run hit XXXX for wireless,

José Ramón Mas

Yeah.

So digits different our from double we past. revenue Comm than perspective, to said a versus XXXX. we've business expect be the in XXXX much up what Not in

the business. by to and decline incredible the offset of business wireless then XXXX wireline DIRECTV a we in growth think is From perspective, XXXX primarily story. a saw of more in We expect our both We lot flowing. our a order wireless FirstNet

flowed half year. The take until in second this first but QX revenue the our more we've today. frankly and The are quarter, little much think to of I those are FirstNet where we than time. the see we order constructability FirstNet very projects with underway, associated tripled won't quite But that from projects of generated of revenue

fourth quarter. going third the continue or revenues XXXX. So see ramp hit to We'll into big a won't until

it going a And that think peak think in think I come dramatically there. is. XXXX I is through the continue XXXX XXXX grow out So or I don't bigger either, to probably year XXXX will XXXX. for than a to is peak's

place. the in we've flow, in in good at there's deadlines feel the we're very way we customers The XG. so is committed, about We're early got to we're think orders make, order same what side seeing I that some good hand. of it's FirstNet. a seeing stages And So of that

I and of opportunities. in and T-Mobile growing they've they and look in solid XG I one and just customers, business think the for upgrade think importance the growth way And meet about think between when carriers it's T-Mobile-Sprint same the got talked that bodes to both you are network, I think, spot. have the their needs to They've like to where on and even just we're all do, companies if you their the a put to ours. AT&T at the fantastic really the well about think are to Verizon deal, their going that going Sprint have be to extremely what we networks

Chad Dillard

Thanks. in jump I'll queue. back

José Ramón Mas

you. Thank

Operator

our take from ahead. with Duncan go Matt Stephens. next Please We'll question

Matt Duncan

guys. Hey. Good morning,

me add the quarter. my Let on congratulations

José Ramón Mas

Matt. you, Thank

Matt Duncan

that's we peak call that's only growth, the at talking there. So, there a backlog you've and José, you're backlog thinking in backlog that it an you're and let's backlog quarters before of sticking XX-month Comms up three had Comms and least over with about away years XX% five get about consecutive timeframe

you're to that if grow backlog to reasonable you expecting the ramp it year so, is would could there? that the in see and FirstNet So XG given reasonable continue And what's assume, level in exit within business? backlog you this

José Ramón Mas

detail. don't run I we've math that Matt, know that the to

you're think I right.

so depends what continue Our It's space much we lumpiness backlog Again, order agreements. easier is an to all is maintenance long-term expectation within going from under backlog a the to Comm lot our happens because and about it grow. manage to on flow. always of talk in is it

I the last but over now been through are a do it's year. that course we're number the expect obviously growth to there. the growth, of of higher lot know positive peg the lot numbers than So a don't going of continued it, a we months, developments to balance XX the

and tons happens going activity to growth point. obviously think around T-Mobile I there's be I – which The going opportunities between more to help that's we somewhat backlog get would Sprint. help be obviously to deal, which what clarity that some driven and with going is around at of that, think

Matt Duncan

is capital And then question on allocation. second my just Okay.

balance now something to with acquisitions of see the other could year-to-date, get that end line X.X point the stock two the those the like you How that continuing the forward, basically still yourselves out and are between feel – over there seems now? finish here Is might this call you back You've you it fairly do million inexpensive. in do from bought next that each shares year? right

José Ramón Mas

to take we've the so organically. affords all advantage been market trying of about that right perspective, First, organic an about executing us opportunities from the it's

long-term and geographically price augment buyers teens ways that in our all look ago obviously at stock was bought With value that opportunities. opportunistic at stock buying while to growth deeper. opportunities we're been for I business we perspective, been in penetrating significant We our With always said, somewhat well organic time of trading When big think wouldn't from businesses. a haven't at stock. out that our customers we improve We've be buying we're the our us. Last today, we and we we think the not have and if looking said tremendous of a stock. across both worked

into today's Going X lot times got our we've being in call, is about space of we're at done reality XX times. between to seven private trading a that deals The earnings. times

sector So to we're companies good significant with in that think near MasTec. at as discount as are what's a the private don't diversified happening pretty trading and I anywhere as

a So story, believer in today in we're stock. believer our our a we're

you think expect can this I continue. So to

Matt Duncan

it. José. Got Thanks,

José Ramón Mas

Thanks.

Operator

we from ahead. question take will B. FBR. our Please go And Alex next Rygiel with Riley

Alex Rygiel

and you Thank great José. quarter,

José Ramón Mas

Alex. Thanks,

Alex Rygiel

years? doing handful can next down you little what Puerto what a expand first what but bit the the the Sorry if this in of quarters opportunities asked and over you're contribution Rico, was are was future already, quarter upon in the or

José Ramón Mas

Yeah.

for on time. lot of couple we've Rico, Rico some there been doing transmission year. the to that very very somewhat last the Puerto restoration the There opportunities opportunity there supported ended there the a the quarter. significant feel of storm the about. Puerto With Puerto confident we months The large quarter, kind going we telecom time. are over early done crews Rico. storm had long Rico work. little we be of of significant bit everything. last Late work long a for a into in towards the business, distribution RFPs long-term so side for growth a is participated number in Obviously blow fourth said, of is to end first We've of a a did dealt that first in of We and that that power Puerto quarter, we've So

So that infrastructure. be to there's dollars of going in invested billions

to time, of are but the on invest happen. make somewhat they've it lot Lights say seen restoration struggled lights think is phase network we've to I of what their a the on money and I that got most of are first reliable. they've in and

long-term opportunities to going there. there's So significant be

what we the to I gear there of think able that do were and were up our demonstrated period perform. to time for there we ability

well bodes into us. an yesterday, telecom that talked investment Rico, additional think FCC the infrastructure I well I for for the which us. billion believe of Puerto bodes So about $X also

if because – built have a talk for in numbers a influx. we've our the I we Rico about don't lot we But XXXX, for of So balance Puerto got don't think it the of quite lot the are is also they they've opportunities Virgin a natural there from – opportunities in and had. same there. significant There's from of Islands frankly, that continue the issues significant as a disaster lot lot to recover

frankly, So this the two- think helping is from I some situation of tons opportunities those quite three-year benefit storm a over the or unique engaged nature of short-term is recover. got we a in that but stay them period markets, actively in somewhat to there

Alex Rygiel

XG? there wireless, to with is going wireless tower what's of shortage in in the be be it the point where climbers, in pinch to going in XXXX? to turning the was the labor In past, future And but

José Ramón Mas

Alex. more be to going broad It's based,

cell of But every that that the need going on. you're incremental these every all to because have going I have doing. they're tower climbing issue think going much still to you're touch also initiatives have is a existing pretty carrier they're tower of to small to

we're how are network those around So think, of to But a points that's of have different where going the and to ramp best And in set. I in the somewhat planning coming and think years, see between a bottleneck there will Communications. across these execute we're touch I on that fiber we're that the personnel. I going be terms in that already skill millions of to think that

Alex Rygiel

you. Thank

José Ramón Mas

Alex. Thanks,

Operator

we'll take with D.A. from Davidson. And ahead. our Please Brent go Thielman next question

Brent Edward Thielman

as well. quarter Thanks. Great Good morning.

José Ramón Mas

Hey. Thanks, Brent.

Brent Edward Thielman

been XXXX. focus saying that and think extend Oil preliminary in now has what with Gas the But out develop. economical part a on that or been is customers to of going realistic I it new there that the out, the what's jobs have that Is to on looking of on seems continue discussions now, more to of here? seems Obviously, to capacity saying it sort me some market jobs sidelines you're you're José more for from discussions there.

José Ramón Mas

because reasons. significant needs, we're different Different different projects different there But in is call across customers I'd it's fall so a a customers not broad-brushed that number activity buckets. for – there's it from of different board have answer, the seeing

plants. power be may Some to power

out, it is of offset to their costs enormous an just of truck a Some All-in, being to versus have product there's that that some that on that may are about worked projects amount you're obviously being a output. Others planned, just being extracted and seeing from talking from likelihood rail. go. think they that. want that's necessity goes of high are three be with years When transportation reputable project where we're customers be a may risk a where we

have you position the customers extent in we're know viability and with and bodes So the to record can it to success projects money of that I that the spent yourself long-term have past, we better significant a that. those track seeing and lot of we think,

that them. about in customers So, they there They're talking of talking our jobs out The the about aren't not major majority have them publicly works. announced. major are

feel that we what's encouraged the So happening highly in of market the business. and with long-term viability

Brent Edward Thielman

and focus of now. looks for you I investors backlog, a the less look you kind execute to backlog fair but segment, in in guess Industrial those that particular more for say and comfort of to Power anything around visibility about projects the that margin of complexity right of MasTec as some the just that? profile then it's Can us talk And that solid Okay. the give terms maybe in jobs in on

José Ramón Mas

couple relative years we be. a is of underperformed Business very where business well. we performing for a wanted to were where it's that expecting and Look, to

an are we XL about was year solid. solid. from margin I we renewable a talked last That capitalize hope a year. construction. gigabit is opportunities had Growth We in the Backlog We to new got again of back. XXXX. X excellent think award that large while over

the all visibility that the anywhere next recently time. projects the XXXX, be Only was more a for approved. of backlog. Some built of significant those way one in so start XXXX we current XX those current are months Those long where have that portion projects into going in from had projects are been to

naturally of projects as about The renewable There's backlog going get again So are where hot to bullish are we've a to that's that some closer the that got projects kind now. business. backlog lot of ongoing roll into greater in pretty fruition. is extremely and right we we're of those than just lifecycle of market that

Brent Edward Thielman

Great. Thank you.

José Ramón Mas

you. Thank

Operator

- our Suisse Credit take We'll ahead. L. Securities just go and question I from quarter. Suisse. next guess Hi. nice clarifications two Cook time. Good given the Jamie Credit LLC Please morning Jamie with (USA) Cook

You like to looks degree. some revenues beat maybe numbers. It quarter and ET Gen even first raising you're the Power

years of so percentage as a business and Oil over the be just become of Just could sort robust get for of portfolio? about not this the several of is next concerned growth, context, it guess to markets longer-term very too what to to you, want wondering, too plus or – revenue over the question that. you you the of portfolio what $X your clear, sort to okay, then manage the a just of So to Gas be take want forecast not billion we And Oil given and this think next you lumpiness, mid-single-digit you Understanding are that big prospects up percent and I'm are the in couple is and to that a normalized you're I but still think assuming the of in big And billion-ish should about Oil and Gas degree how that are, Gas José. the degree years, off concerned about X business? peak, to level? do business

José Ramón Mas

couple a Jamie. there, So questions

normalized yes, First, from to grow our going anticipation the is we're run single-digits rate.

being last the So year talked $X about billion. we rate about normalized run

Communications with little it'll percentage we that outpace going as longer-term business about to you're us pipeline pipelines, business talked shrink point, over but business grow get a no off number expected have We two I'll of the in I markets very that's no and the solid over hoped I this our Comm growth we've or naturally think confident afraid as pipeline think the With mind think all what's to going level happen see we're what is One, I that But – they've have good And because to grow don't continues a business, that the for would that that of in opportunities think ad said, when we I total in sustainable a number business time. a naturally think in our two don't that that there things. the that do. impacted that so we – into think we've there And long-term expect very have because will think is mid-single-digits about. I I doubt our about think a don't our and it's nauseam to activity think performing I you second. been of that of XXXX. base we're going is way a revenue, think at we in We they to have us. and again we just

So is be think going to market U.S. strong. the I

U.S. the the I strong be amount. of up. are rig think in market counts Again is perpetuity to the going way

the of to going infrastructure, need especially that so differentials at other of production, the the think in products delivered, long-term percentage is cost the age when those That create you be as production. the growing that the decrease production to is as amount into of I building based parts and U.S. and world look production for – changes. and world of where world itself the is their pipelines, demands on U.S.

the very south in Mexico moving We've side significant last of area obviously pipelines I lot sense. makes growth think it the important. that's just into seen years because a a on couple be

We're years I a time. on to to going is are a time. a that over market there's One in business. our bid perspective seeing impact from back for expect that tremendous two Canada right that Prices as are low. have markets the still And We think long comes Canada pipeline then coming continue now. in viable activity

you've and deals. today there. anything it type a a our Pemex. it's the by They're into two, at piece small look where business and needs. portion I when of like going out more long-term oil obviously business. impacted then once be And chasing of was it to years very decline think public-private not was reshaped three sizable Canada, we're a So I that's I our somewhat of energy lot Mexico they're how doing of Mexico prices think kind their got meant heavily what looking They've for But

going to think significant ramp I we're see that. a to

there I opportunity quite think is for large. the us

I confidence So market. the the those will U.S. we With that U.S. business I've us don't market. even to that think, any continue slowdown got in in in a the potential lot the and the declines of said, grow expect with offset U.S., markets any help declines

L. pipeline that if and Jamie to the for our performs appreciate way Okay. you. (USA) business. really the portion could, I Credit coming So expect for market U.S. to even could Cook Securities a it bode Suisse it we the Thank out, color. we total the of years LLC think well Mexico Canada where and play -

José Ramón Mas

Thanks Jamie.

Operator

next Baird. We'll Hauke with go ahead. from take Justin Please question Robert W. our

Justin P. Hauke

Yes, Thanks my for good got here. two question. morning. taking I've

the at first So appreciate at you George, just that a better nature been project bit work a sounds large maybe your under in little since one it cost cash one, was has talking the structure, helpful. unbilled, I like the reimbursable understand especially hoping increase this I least the the about flow to was maybe the point. for of

collection to more that, you give has little the then could continued build just color? of wondering why I'm for So timing on the and the if visibility a that

José Ramón Mas

Yeah.

José. It's it. answer I'll So

projects. it our larger at driven pipeline projects, of it's when two you two been I look So think main largely by

nature, cost in I approval of think is those them go of we still through even though an to one got reimbursable process invoices.

if a grown permitting So have expected. are contracts it, have been delays. they The projects The have you expected somewhat were. were above think with lot customer taken in initially these beyond and hampered the what longer than that or value what we about projects

to things think I of And process I takes process your – and normal invoices approved in contracts. what have have a customarily those that. also bid So end, you estimates it's get think quite in to out always approval the and note as frankly you in get initial longer that the are than that flowing have important to

in, they So as things flow more stuff approved it get in. builds gets built

those grown, it's coming someway. to highly we numbers as and of months conclude new our confident work. we out itself We're in kind the obviously So affected that's that our clean DSOs going the begin to projects

they'll than those So but there's next or take expect, question slightly running themselves us in we no care think the they run that three to higher also we are would for months. what of normally what two

Justin P. Hauke

there that that at the booking, as forward of you Are to you're here, to understand I guess, roll here fleshing revenue I guess, a wanted understanding program And at that's be it's as or was that little of at from FirstNet, that you but Thanks. like steady a yet, hasn't contribution where Okay. looking No, impacted on come second window level of XX-month kind more more. more still a I Thanks the peak I just bookings ramps-up? bit been is the booking question, contribution. backlog to would continue just for then that. the really we sounds that materially it helpful. out on flow your curious my

José Ramón Mas

Yeah.

FirstNet it or as order to the saw So, less first the didn't in in triple activity have big quarter impact We QX. more we earlier, said from was. related a it where

the last We expect it fourth continue. quarter. stage didn't in to until the Again, opt

going think think build of you're a years think is work to peak. a XXXX project, be is plants. stretch think a and it is I see is frankly, and to by years don't going I short This still either. going When I the peak. And XXXX the into project. grow out you've look lot any long-term peak of don't and quite the I the this isn't of at So got imagination this you term rollout, building out

So next I and see think we're for to to growth the going order from year-and-a-half. backlog activity FirstNet growth continue

Justin P. Hauke

Great. you. Thank

Operator

like Mas have at back conference time. additional any or I this for remarks. to to questions no phone turn José would the now And we closing additional

José Ramón Mas

everybody to we in quarter want to of updating thank Thank second today. call participating just couple for forward on look And you. Again, our a months. you

Operator

this for conclude we does and and you Ladies gentlemen thank your today's call participation.

may now disconnect. You

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

MasTec (MTZ) 1 May 182018 Q1 Earnings call transcript