MTZ - Earnings call transcript Q4 2019

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Operator

Good day. And welcome to the MasTec's Fourth Quarter 2019 Earnings Conference Call, initially broadcast on February 28, 2020.

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

Marc Lewis

morning, good and Nichole, everyone. Thanks, fourth Welcome call. to MasTec's quarter

may the for Securities operate. forward-looking, forward-looking statements communication, Reform made plans described such we harbor anticipated to pursuant we these MasTec' In Private Following as statements statements that future where safe in trends of in XXXX. certain industries regarding make statements Act results, are Litigation and the the

underlying on company the conference These not day are initial uncertainties with significantly communications. company's of press or should or uncertainties forward-looking statements these results this the and filings are one our actual and Should broadcast subsequent knowledge. update or call, expressed these to expectations and on these prove events may does the results undertake of the assumptions assumptions our based from implied Various incorrect, differ risks in more or in materialize of expectations detailed releases of SEC. or any risks,

we discussing release management, and by press remarks will supporting yesterday's metrics today's adjusted as and in be In schedules. reconciled discussed financial

this we in non-GAAP posted the reconciled of or PowerPoint these comparable found Investors News be Web to may in certain measure and A the in non-GAAP financial call. sections measures our can financial GAAP use our in located comments of measures earnings our not release, most mastec.com. addition, financial in reconciliation In any conference at XX-K presentations located site

followed the followed we Q&A the to and will by Mas, Jose, our from Jose Officer. CEO have and George our XX and of we our call Chief minutes. period, expect will These today, discussions review remarks financial announcements last be President call us Financial about be George. Executive Pita, With by The a format opening by Vice and

important talk Jose. over things had great today, of I'll now a it Jose? quarter and about to turn so to another lot We have

Jose Mas

report XXXX and and record Today, fourth be financial Marc. welcome the consecutive quarter reviewing markets for and results we Good call. fourth quarter levels. to to outlook full were year as at for providing well And the XXXX of as year performance. year-end serve. I'll XXXX am my marks fourth Thanks, morning. XXXX results, that our our happy record MasTec's financial I again

More providing adjusted flow income, XXXX. and record importantly, again we EBITDA, are net of guidance revenue, levels EPS cash for

environmental the for to our I'd and performance. a the our great traits great thank I position project for And the in deliver MasTec to providing like these to congratulate it's customers. honesty honored men been of women safety, quality committed by such and their The and am MasTec integrity, men people's because a great at success. of and growth are continued customers women stewardship, have results and been we've lead of group. able privileged and of values ourselves to that best recognized outstanding financial work value. and These our fantastic

$X.X Now, Fourth And adjusted some million. Revenue $XXX $X.XX. adjusted was EBITDA quarter was EPS highlights. fourth quarter quarter was fourth billion.

EBITDA the was from billion year, versus was million. full year was per for share just XXXX. billion. adjusted million. $XXX time at operations $X.X revenue the $XXX full the flow For under cash earnings $X for in XXXX XXXX adjusted And XXXX year exceeded $X.XX first $X.XX

record at these levels All of metrics were XXXX. for

quarter summary, In another year. an we excellent had great and

came considering was Communications slowdown results the flat little mix. the good comments of changes with expected make industry. sequentially, to sure bit like on activity and fourth margins them in we right I'd with a the the merger where associated which the were in First, quarter. Actual revenue basically in

as were cost of reimbursable work by performed impacted XXXX. into and oil strong, again work. expected, the little As were we out Margins gas very revenues push

And margin with group of EBITDA our significant fourth transmission $XXX of digit quarter fourth quarter. delivered in generating revenue X% revenue margins. best double their improvements last million strong power electric segments and generation nearly growth segment the delivered the year's Our quarter versus year,

the XXXX could been on better. financial Reflecting full have year, is the record truth while even at metric every was levels,

and us a mentioned pushed a significant I because was significant complete had pent in oil in group demand of the and amount a of was activity that will of merger in great a delayed until to gas XXXX had Sprint year, decision our into XXXX. resources the While communications and there of revenue the beyond. And we there amount that this is lot merger believe reached. benefit up XXXX I T-Mobile

half full the year us it expected visibility aren't expectations. amount second While to subside effects gives of completely significant XXXX, those of our until into

million. XXXX, revenue EBITDA and we guidance of announced today $XXX of billion guidance Regarding $X

oil is project mix. that expectation margin, related but and revenue revenue will electric improvements decrease growth oil growth. double should all to a in segments in all gas to and and margins power generation enjoy regards of we with and margin communications, gas Our enjoy digit our expect transmission With

we this XG capacity communications, wireless be by growth In to and investments expect fiber the of year work. expansion in networks, continued our driven related network optic

of before, requires of elements are of elements MasTec both CapEx involved. on spending opportunities significantly XG we've expected network construction those the XG said unprecedented. significant cycle based enhances of the for activity. As the budgets Each length the total number and number

do geography maintenance, optimization extensive on service. with carrier wireless or conjunction as services deploying end-to-end work to management across any data us front services with allow these ability and sell in and end expertise to an Our our coupled data

XG how is on level these is, deploy activity denser the Based world much network required around to the a of unparalleled. networks

deployment. us XG and to in expertise history Our uniquely be position a leader reputation,

will maintenance of be maintenance be about This and incredibly network positioned initial complex also the deployment, We by long-term we're that cycle for also the but opportunities. won't a the dense, increased evolving driven more well just network. bigger believe requirements

contractor wireless we on North largest uniquely are to execute these the America, positioned As in opportunities.

stages of in sizeable a opportunity. early making today as the We significant we investments are people resources and in multi-year are

in the years growth expect with significant utilization. We scale as reach we full improvement and a strong in come margins to

also build significant Network, plans. We the rulings Sprint the to are encouraged very T-Mobile, and recent all by merger. have related court T-Mobile/Sprint Dish

outcome of While to the will lower in we of the activity believe the in increase into of we of levels around levels fourth uncertainty expect merger led the quarter second XXXX, activity to continue XXXX. first XXXX, pending which significantly the half the half

Moving segment, and we gas to another our oil strong year. expect

utility strong replacements integrity enjoying and are main We project long-haul broad-based across facility midstream performance our and construction. work,

current work. on have levels excellent and based We visibility verbally backlog awarded

roughly While billion, awards verbal year-end subsequent $X.X backlog at amount was another roughly and billion. $X.X to

diversified of number more both is and geographic today work projects concentration. in Our

to fewer winter of projects in we slower have expect and We our XXXX, as projects are to oil most a and compared starting gas have spring. start the

in have the quarter example, towards early starting we major and quarter, quarter. first For four third the couple of in end second projects the another five

XXXX be back loaded of revenues will more work schedules. half because the

and Margins is We XXXX awarded very the and activity of were levels this have related primarily a expectation and in mix demand strong. is XXXX margin in XXXX, a work for very in XXXX. segment our cost reimbursable in more work in in reduction guidance to strong been already included with change

very Transmission had Electric a Our solid year. Group

be XXXX expecting XXXX levels. nearly a leading last the quarters year more EBITDA for to have While will what we better transition believe couple the we into we were full business, in year tripled of had been of XXXX this than very a strong XXXX forecasted. be

We segment the XXXX grid Catalysts shift-to-clean general expansion. continued strengthening expect business revenue replacing and spending the in in enhancements the include growth with double energy, margin digit and infrastructure. around driving aging

billion backlog year's annual deliver we fourth in from for and $X.X last generation XXXX. segment record strong the billion growth. The Revenues revenue $XXX solid group nearly quarter increase the also delivered pleased strong XX% I'm grew power first growth. year them Our exceeded has of that a to million expect $X time, announce of another to segment and since revenue

margins margins saw quarter nice done job wind, in improve civil we basis a the in have power diversifying year segment We've We full markets, continued opportunities. the expect term in solar, uptick growth opportunities generation expect a long XXXX. great on and to and a fourth strong and in the and

in and be had better. record we we XXXX recap, expect year another To even XXXX to

More are we growing changing we even be of The positioned are to all itself longer excited importantly, prospects. are about we has serve. across and our the segments we MasTec evolving, leader term more confident a and markets serve

the I'll now George call turn over to review. financial for George? our

George Pita

I structure, everyone. Thanks, cover initial XXXX. quarter for expectation annual financial Today, XXXX good results, well as including will capital morning, and fourth our and Jose and flow, liquidity guidance as cash

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

capped and all results summary, and by have GAAP strong record financial adjusted XXXX quarter fourth XXXX In a measures. year virtually we off

of record level expectation backlog XXXX support trends supports that another XXXX MasTec in continued importantly, long year end beyond. for term growth for year our and also in will markets our our end and optimism XXXX record be Our yet

flow at As expectation is as exceed XXXX that will And generated new sheet level. shape is yet in another our record excellent record from a operations. of flow we enter operations from XXXX, balance XXXX year XXXX cash our cash

allowing ample capital Ratings us with summary, As flexibility full us upgrade. noted comfortable of performance that in to liquidity strong advantage its are yesterday's leverage has ratings cash we our recent recognized our S&P opportunities. Global profile future metrics, and release, pleased and provides leverage consistent flow take with In growth structure

diluted performance quarter per of XXXX quarter was we of per was and metrics Fourth Turning XXXX and Adjusted annual entered XX.X% revenue. share. of the EBITDA fourth $X.X was of Adjusted with adjusted or $X.XX were million expectation fourth EBITDA quick as was XX.X% share, earnings million strong quarter. representing performance generally XXXX $X.XX earnings or our were in to with diluted results, these billion. line And record all a adjusted quarter financial And $X.XX was billion. levels. revenue. recap $XXX $XXX revenue Annual revenue

initial initial million, by our initial actual annual actual $XX earnings annual $X.XX Looking adjusted EBITDA year XXXX our expectation, that by a exceeded $XXX annual beating initial significantly XXXX beating XXXX adjusted diluted performance back share, actual per our of and adjusted share. to with per ago, earnings million of guidance $X.XX our expectation expectation

regulatory early levels. year and of compared regarding and XXXX. lower of due previously last oil $X.X XXXX oil XXXX billion, will Fourth segment cover $XXX activity large the revenue decrease pushed delays results. I project an quarter to, same revenue was segment communicated, segment XXXX gas Inclusive detail annual caused our by and gas as XX% impact, compared winter break some X% into annual completion Now project period to million decreased this to a as revenue a

oil XXXX was adjusted adjusted adjusted of rate Annual large quarter EBITDA revenue XXXX of Fourth with have rate XX.X% of over and basis revenue gas rate EBITDA year. segment and EBITDA performance gas and gas XXX segments improvement as last XX% XXXX reduced margin oil annual margin includes the And benefit was project, margin levels and project segment oil lower points margin, XXXX was we this communicated, previously plus costs activity. mix of XX.X%.

XXXX, With oil Jose margin activity multiple expect large oil XXXX. of margin As anticipate including our and XXXX We XXXX that the revenue teens we level significant plus on to the adjusted his increased lower that verbal an we forward profile, range coupled grow range. high significant in combination EBITDA a in segment estimate, our in based with project gas activity in gas with activity the project cost rate segment referred backlog, to remarks. move and annual XXXX award year-end and mid-single will of annual digit this

start our XXXX late for in XXXX, completed XXXX oil early to spring on expect gas revenue segment new project activity activity, as pattern summer follow as selected similar for date a unlike traditional we XXXX. pattern of well a activity be will a current Based more that and expectation project restart

during during significant project of second of and revenue the and the last decline the compared first growth and half half activity and revenue project quarter expect year, XXXX to project when with half expected first we XXXX, third second to compared to For to revenue peaking the XXXX. last show XXXX half year activity activity

compared million to wireline compared growth Fourth period year. X% quarter Fourth approximating home by to revenue communications year. last services. Annual annual quarter of installed XX% the services, segment digit trends characterized to same segment communications $XXX revenue X.X decreases last $X.X fiber XXXX wireless revenue of double increased approximately XXXX offset billion XXXX segment the communication partially and are by continued in increased and

communication annual Rican segment As a approximately efforts. reminder, revenue $XX non-recurring also million hurricane included XXXX Puerto relief in

up and XXXX margin The and fourth annual in reflects initiatives future of maximize communication in order segment quarter costs to startup rate was capacity costs crew revenue, segment ramp we invested X% level communication as growth adjusted in related our capacity to and this project XXXX EBITDA potential. decreased rate fiber

remarks, evolution As Jose rapidly evolving for term his long S. in will our we is demand U. wireline significant indicated and drive telecommunications wireless and market our and fiber believe this services.

adjusted expect and year. will communications revenue annual adjusted XXXX adjusted and and show to to strong compared EBITDA the With of EBITDA performance balance revenue, rate improve expected margin rate adjusted the approaching approximate segment annual quarter EBITDA rates quarter year, the rate growth revenue and EBITDA adjusted XXXX XXXX billion quarter margin second We both first with throughout accelerating of XX%. to rate margin XXXX improving EBITDA performance adjusted the during and annual the margin margin that of $X approaching first levels in assumption increases includes EBITDA XXXX XXXX. This when rate expectation XXXX

Importantly, significant XXXX to to the in improvement revenue, trends EBITDA for performance, market the beyond. progress reflects XXXX XXXX margin compared over adjusted us and while rate when improvements our affording we communications communications a significant adjusted will additional expectation the EBITDA anticipate segment potential continued segment year, annual and continue

transmission margin XXXX EBITDA an was annual X% and adjusted adjusted annual X.X%. And was segment point to compared compared increased of improvement electrical XXXX represented quarter million same basis, Fourth period the performance to transmission basis XXXX XX% Fourth $XXX approximately was electrical approximately revenue last EBITDA million. XXXX’s year segment XXXX rate quarter XXX XXXX revenue revenue and $XXX levels. to margin annual rate on

This segment of XXXX also over million. was in backlog strong $XXX the

electrical margin in rate growth somewhere to improvement XXXX. annual teens revenue compared transmission expect the in XX% adjusted range when XXXX show segment We a will strong high to low slight EBITDA with

coming adjusted this also expect segment and for for segment conditions margin revenue growth We continued the and are believe end years. supportive strong this market EBITDA in

and period. margin from revenue quarter and of year approximately to are segment with this generation increased XXXX years adjusted EBITDA X.X% a annual short for million billion We've margin two annual potential $XXX in Fourth and to power in expectation, a have grew growth for XXXX XXXX saying EBITDA delivered sequential XXXX was improvement well industrial $X segment's this of we million, rate Fourth this revenue has segment X.X% and approximately growing rate on this quarter XX% XX% the to strong billion. several revenue been that to $XXX XXXX revenue, adjusted $X significant over segment. proud

for annual profile of levels related was In by inefficiencies summary, potential segment. XXXX adjusted EBITDA the margin adjusted segment rate performance and this term managing high performance the margin more quarter XXXX a margin of growth EBITDA rate negatively believe, is indicative for fourth to operating revenue this impacted we longer

approach industrial very activity active record renewable project levels continue backlog We experience a XXXX by market to that generation as power and and evidenced $X.X year-end segment billion.

high range. somewhere XX% strong in the towards we this As high growth to look segment we show will XXXX, expect revenue XX%

in XXX the annual range basis EBITDA single high range. performance last points margin over basis mid XXX expect adjusted somewhere of also to improve year rate to to the to XXXX points We digit

of these Now services top services summary X%. three I'll largest install-to-the-home a and for as XX% of On offerings AT&T XX the was revenue XXXX XX% combined our service derived basis, customers percentage our the discuss approximately period revenue. was fiber and annual from revenue. a totaled wireline approximately approximately wireless of separate total

organization, independently while AT&T diversification within reminder, under budgeted a that umbrella, within As managed corporate corporate us to universe. note one important these that is it are offerings, giving that and falling

energy of wireline Kinder was revenue. comprised Phillips the Pipeline X%. XX% were both wireless of also customers each. at was and at EPIC Iberdrola was revenue. Energy, up X% And X% was Energy Corporation with Duke Midstream services NextEra Verizon XX X%, XX top Midstream fiber and Transfer X%. of was X% Equitrans each Morgan rounding and

$X our fourth and increase this comprising derived and highest increased substantial mix Individual Electrical service Communications, have level revenue a billion of we of XX%, At backlog Industrial backlog during segment to recurring Transmission backlogs. includes construction agreements a on MasTec's represented our despite project in history. in the sequential a and activity year-end continue Generation Notable portion basis. our the XX% projects year-end quarter annual revenue master approximately with levels, activity highlights that of XXXX, comprised Power

It backlog for XXXX backlog restoration revenue in thus, comparisons unduly noting this generation services And Transmission is as worth led year-over-year never XXXX this issue that period Rican to impacts segment. year's reflected Puerto represents the million Electrical $XXX last no approximately of this included amounts. any current was backlog year-end of ultimately compatibility storm Puerto segment restoration backlog that and Rican storm last

award indicated at Lastly, is awards point as trend as the and years, into time. XXXX it given only the burn a oil optimism regarding we've should which Jose and mentioned each multi-year opportunities. In come contract performance strength exhibiting trends backlog large be our evident markets, in lumpy end of his for support single be significant our quarter growth And remarks. large summary, projects new noted gas backlog sizeable and activity, off verbal can backlog our in this are

cash discuss I'll working liquidity capital well capital as and as Now investments. usage, flow,

coupled timing. debt increase based XXXX, last at simply year of ratio ended balances levels the with DSOs higher to year on cash less a XXXX fixed XX days year. a level eight selected fourth XXXX project to quarter flow and $XXX in XX ended Of project was activity $X.XX day and with days debt ended lower on revenue combination year book days gas XX this cash due to retain approximately We compared project oil or of of DSOs, from operations times. X.X with we which the million defined the For in net of leverage billion, generate as record equates total the

in Additionally, one of course had about from we arrive rather customer, by $XX end. than year the days four in equivalent outstanding million collections approximately ordinary January

XXXX first approximate DSO with Given our coupled would profile end then amounts, of XXs expect the our revenue mid-to-high return DSO and levels quarter we of quarter stated seasonality year to fixed levels to XXs. for retainage that within mid-to-high

flow billing flow of less CapEx record cash that free from net XXXX exceeded adjusted a XXXX from and collection performance cash strength the rate operations proud expansion, free again on growing higher flow annual new XXXX record our ordinary XXXX exceeding also based are as course again and cash flow cash once flow earnings operations income. annual our operations reached with net in Accordingly, We highlights was slightly level cash expect from This net the we activity, and income. profile. defined adjusted once cash cash than flow planned

potential As solid ample begin long rates, This strong take of structure maturities, to is XXXX, any interest opportunities combination our liquidity. low structure us with to advantage capital near we a shareholder value. flexibility significant growth term and term maximize capital no full gives

As remaining a approximately share million in we repurchase $XXX have reminder, open programs.

CapEx equipment, and leases. Regarding purchases $XXX million under cash XXXX incurred net to anticipate in was million finance disposals additional an as equipment our equipment $XX spending on $XXX million with CapEx cash of CapEx in incurring approximately net in incurred $XXX additional an we XXXX, cash finance annual approximately under be net defined million leases. We

$X.XX we annual million XXXX and of diluted Moving are earnings XXXX or EBITDA of XX.X% to adjusted our per revenue share. $XXX $X revenue of initial with million adjusted projecting of guidance,

believe of for the periods, diluted our will will presented XXXX with tables company's the impact earnings in noted for share first identified net of tangible the public of all measures tax yesterday's of release, common and adjusted presentation results per compatibility with and peer. on We quarter exclude As of effective largest practice assets amortization the this improve of acquisitions. is all our

per the purchase release better We XXXX the schedules with compared earnings per on share volatility which annual share nature supplemental yesterday company's adjusted believe represents show these The the change, apples-to-apples in results this charges, to presentation the basis per of in diluted per share given this process. for share this an XXXX. XXXX the impact thus, these $X.XX adjusted in of $X.XX for non-operational from of also our to And presentation earnings XXXX periods. the $X.XX press non-cash, diluted coupled inherent both presentation charges equates is and comparison approximately per share accounting

will of basis. Effective shown be with period all results under historical presentation the quarter first XXXX, new this data

XXXX As expectations modeling color guidance segment previously cover I other we briefly have provided will some purposes. expectations, to for as

We occur expect with $XX to million any purchase XXXX approximate in annual of interest excluding this XXXX. share potential may levels level that activity

million for estimate share XX.X XXXX is Our count shares.

expect X.X% impact over of to XXXX and the XXXX a approximate increase timing activity. depreciation to slight We rate due of XXXX's capital annual acquisition additions expense revenue,

in We segment other expect levels. Waha our that earnings from annual equity operations approximate will fiber XXXX in XXXX interest equity

We primarily net than adjusted of a expected X% expect annual a XXXX, to improvement with over out revenue XXXX less of overall of EBITDA result as corporate this lower expected charges. earn segment be cost slightly

interests attributed income net to XXXX’s will expect We approximate cadence. non-controlling levels and

will that quarter expect the this adjusted to approximate quarterly approximating with quarter a And only be discrete XXXX we XXXX this in rate reached tax first and benefits the during XXXX tax with to first adjusted blend adjusted due XX%. rate tax that subsequent XX%, approximates annual tax lastly, an rates recognized income expected the zero deferred XX%, will that expectation, an near tax rate annual including

$X.X Our guidance adjusted $X.XX first or $XXX X.X% is of share. earnings EBITDA revenue diluted adjusted with revenue billion million, quarter adjusted expectation XXXX for guidance at and of

transition typically new oil customer where a a quarter lowest cadence also of gas discussed due seasonality project first reflects our represent timing As XXXX to whether reminder, and and and capital earnings previously activity. results to the budgets, year of

range segment growth single year. compared will revenue terms as of XX% levels expected to to of accelerate digit of during incorporates range the XXXX expectation half revenue half cadence well to XXXX. the expected XXXX of half compared second and on XXXX the performance, increase half indicated project timing expectation additional revenue This timing first activity, oil gas XXXX revenue as consolidated color the in previously second consolidated first decline communications to the the In of high when XXXX, XXXX the mid we in expect and of some consolidated

the the expectation we XXXX rate digit of half first EBITDA accelerate adjusted XX.X% XXXX on will revenue. half be revenue XXXX adjusted XXXX timing, rate Based in will revenue levels, margin high-single due and second expect that to increased of half anticipated our second range exceeding EBITDA margin XXXX annual

summary, are we performance XXXX record our new of to record proud for in to In and performance position be XXXX. expectations have

Importantly, as That our look call multiyear and Operator? believe afford concludes growth us and we we the XXXX, beyond that strongly prepared markets remarks expanding Q&A. our opportunities. over for the significant to now operator we'll turn

Operator

we'll Stephens. Hirschman Instructions] Now [Operator our from first take Blake question from

Blake Hirschman

First year half the then things of confidence back little more that expand that a activity and first into some can off held on of bit piece, that little half of T-Mobile and the half Sprint, the the accelerates the give probably of just you on communications a the in you kind the XXXX? back others and into of elaborate will back on really bit things activity some the

Jose Ramon Mas

slowdown So I half in merger the look think second activity. at the you was the if lot a XXXX, of to related all

activity. it necessarily slowed those down that that in engaged at Outside the think Verizon, second if of at you AT&T merger companies, were you was I don't in So those the companies they or look half. look

were install actually our fourth look the out you AT&T back about we fourth at with with in that quarter you If customer piece, our up quarter XX% last versus revenues year. and

guide a half. to how of first has of and guide, around lot a our questions ramp it QX I in much half our happen And the you know and second know even there's

of actually of like XXXX One that point out the expecting to first quarter communications, segments across first things of I'd 'XX. versus specifically to be that the the we're all quarter up segment in

is of XG we're hoped a for up it, seeing and activities T-Mobile all know and great lot just them of in So it's we in think coming, the despite we're problem The the Sprint have three Dish, industry. relative a would seeing activity still we in the merger combined we we've slowdown and from geared we're position. even of the level not to

on it's We And the forward for really think lot do year. a think going us. part well we're of looking I second And to all to it's to prospects positioned exciting comes There's We're coming. half it. So of be great it it well. positioned more story. execute We're the well work. to in the a

Blake Hirschman

or And then you been here ramping well? project with and is Thanks there of hiring as sticking be And going the that follow-up, margins? lot. that I accelerated worst rate? main up think associated it's Is hiring year do the the the point issues a what then communications, the at to are you you've any when know impacted drag lapping in

Jose Mas

on seeing our are going that's a pay is where to kind of in at hiring be so and XXXX the we point sequential declining, on going investments all It's Well, us. margins that time. expectation. dependent for our huge steady basis We we're we're a aren't made function the industry given any in dividends think to revenue, of margins our

in when to what that is that's and the change has appreciation to utilization. think and we'll believe. expectations only We of in based hitting So on really guidance still That's revenue half think XXXX we when really what the second that flows margin we extent been. the our see starts

Operator

a from take Dilts And Noelle we'll Stifel. question from

Noelle Dilts

oil gas segment about XXXX, the to and talking you've wanted I'm get booked. the a for on to touch on I sense pipeline. just and the visibility trying work of you’re

visibility to thinking of CapEx? awards, in conservative way market, a midstream of that some continue given 'XX? sense of get of might just I get that about more verbal talk work the we're a hearing into to how like you're there would the a companies of much comments sense approach that expressing are of you any is And So billion when how you X.X us could about

Jose Mas

read doing. all what of what understand our We each people in is We're saying. are with We customer obviously it. contact customers. We understand

next customer of the You're different us a couple years. to for of the going course see mix over

slowing While are there some to to the that are there in a down, come. number customers other are that customers years going of considerably are spending still be

we about actual a billion will chasing are projects X.X there projects, to only are very months that in that not XXXX, that we're awarded but XXXX. excited lot XX about. the next XX bullish The executed is now be very We're right more

win in at be capacity. done that the We'll half we're position to but get expect the in that this second we're just we're out 'XX. think to of in XXXX be XXXX having jobs years. full in last the We couple conversations customers been all we 'XX of and We're going And to and the place in ways we're similar we've the going with to in be to that same to that work the not on struggle a in based year to figure hoping our have. be going in expected executing,

term, we've to happening think create LNG. talked We in we're outer about huge amount it work enormous Longer an in with of going believers before what's years. that's

So all industry. and they're despite to CapEx, particular what customers we're bullish and doing still our with very noise the as what's in despite happening

Noelle Dilts

quarter, and just more with year guidance relates quarter with how first you're the to But you're first then give and versus down just coupled for profile versus in just of the then detail of little as the to gas 'XX, more sticking could in on gas, margins looks be thinking and the helpful about first and mix second. half specifically lot year. oil maybe revenues us guys around a margin second the you price bit it the cost-plus the the it fixed in you the will oil for a But of did And provide of about how like them thinking sequentially.

Jose Mas

project on would've that things. finding are back I we're that outs even in restoration projects is what's at have to the if of that we had it couple some work little probably We some to those generated we up, there QX more from been early that caught a was day happening work to work One in the that were flatfooted the hoping a relative to would of revenue. 'XX push think jobs year, because have. end the on related we committed

to the to grow capacity they got we've So once have start.

expenses or though margins again. jobs is slower. will our down, the of QX some The lot So a QX compensated very strong on be some will we’ll even work contracts and be our of should is for that reality be revenues way be

were margins, dramatic We're be they to quarter. a solid but be there'll not it'll QX, first less expecting for than in drop

expect at the and second into going third look we quarter, business to begin ramp. we As quarter project that starts to

of roughly just thinking to being We our quarter double out, half year on and in guidance year we'll how of $X.X schedules the perspective of what the first quarter expect in half our second half kind plays that's obviously, work have almost it the first we're kind strong billion is of second is. in $X kind about billion really a put do to XXXX based second for of with the

of we you I second go kind to if have we schedule so, the that of we plans back XXXX And and that. think to half what half to, did XXXX, $X.X got We about you've in $XXX billion in that's don't doable. play 'XX. see for We guidance, work so plus we going what know we're do to did believe that did about out the versus that believe or you'll second XXXX our to in million perfectly the think very

guidance to deliver very on able in gives that important long credibility, overriding guidance for take the think us. we an such period a lot we've what take We fact I It's are, of theme, seriously. time. know us of very pride been to a we our So the it’s

relative put didn't have we and were we that think any numbers wouldn't we that plan out achievable the think So half to second is very our work we today. achievable

Operator

with Jamie question Suisse. next from take our And we'll Credit Cook

Jamie Cook

very broadly question high. we two come and questions, you. terms to share high, talked margins, we ramping improve you Jose. your the but are revenues the do business? in because even great back our whether to to And in seeing you about and going how through? and business? investment the headcount if guess starting on visibility just a because risk when oil to business Can the But want how conditions need market market changes gas Thank XXXX? versus understanding and about we broadly. investment moderate, just on I the think you're Or the you is you're that XXXX in talk then bidding communications projects Are is about any side, that's weaker One, and of just share is and my revenues second same just the your is sort see you to you the market have

Jose Mas

think I'll great first. of gas, building again, So reputation. second oil a part I answer In job a the our done and we've building that and brand

I forward profile think position. on past. margin as in jobs the of our a an don't we've the customers seen put know what we in in I see any can basis deliver, go what us and I advantageous think difference that's

executed that are and I time to been we've on for looking their long are generally a going projects that think And contractors customers very time, they schedule. deliver on for know and well. on

the financial spoken are is I the think I production field speaks results themselves results our to so it's that demonstrated in they for the But itself. financially, allow have reality you the And and for that results. it think in perform

it. of work a going little we ramp. the first well see Again, side of in On in year. maybe lot a to to half merged half We'll we to bit have for going to the and up continue the year, first the we're we're going than first a be the coming end communication moderate the expectations what see of but to we for huge business, entities of doing second it stronger want the half, half positioned don't are

relative do anything We could some expect with to ultimately some what guidance pickup them. is second. in our we I the of think conservative If

So very again, bullish. we're

Operator

Kaplowitz And with Andrew next question our we'll Citi. take from

Andrew Kaplowitz

that Is about MVP you Is anymore are give discounting mid cancellations maybe can single just way quarter QX. $X.X you last then in initial of in definitely and So And for the guys back the you that some that billion sort backlog growth on And seen had plays going year color is put different high out? that single us though just going that more guide, talking year? you've for change. this to mentioned, that in how you Noelle’s digit. deferrals that digit or question you mentioned

Jose Mas

what So around turned we than already contracts. the first contracts full the quarter. billion into question of in we the expect at turn end More expect QX, to that has X.X into half be the of backlog to first in

that would month next or So here the in concluded so. half we other to be expect

in we're of all end digit not double that business, at So We're low-single hoping digit it's backlog of our growth. oil into growth the growth it's guiding and falls gas QX.

I think that's relative to out all of that's noise there. the

excellent that's think results. I

that. perfectly able would there's customers said, we're of going to a go conservatism we to into do, that in to that to XXXX that do every be our or like everything us With definitely what and going We're at anticipating been things built you're do. like to going some and would project push. is not level looking prudent of assumption some I to that's We're making to done That's last of think a couple guidance in the way going of and and are things kind the get we've years. that delayed

everything just the If that time. in it to hits and to in what supposed that taking But we're I strength our do view at number be speaks we're relative better. is a lot that industry. And reasonable think to we which moderate to guidance, work the XXXX is think I point going of booked a this of

Andrew Kaplowitz

had Power of makeup more going Generation, at distant high, you if that the then expiration? XXX sort and backlog could about what's business the you're backlog Power million but in construction EBITDA the snapback could Is not or know just greater about the too and And expectations nice work margin, X.X given quite to future? at gave I your talk winning Gen, of obviously, it PTC us you you I Gen is want annual on. for be in ask Power

Jose Mas

Yes, so a of couple things.

the extended, growth that's a broad win, so us. really industry, PTC renewables for couple We're Obviously, the business wind got that big don't by, of encouraged and credit to but see for based, years. of their of We're today. a waste hopefully waste been has that types if all driver of a a I think next is I to isn't aware, solar know lot going piece, been something actually driver and in you're strength energy the has

going whatever think So the when. could get take of decides an advantage of They've a very focused is in government it's a come there's investments matter trying build. it's to not -- significant of we We've business. matter to invest just there good job lots through infrastructure, to building the prepare a ourselves which think of very business solid. We done of is that our infrastructure on pieces are if once to been

but that up I are us again, that us hopefully ability based. So very take relatively some to they're broad opening it think market it's executing and of the the that of And really doing things marketing comes, to giving advantage once that we're well.

improvement I margins. in think seen it you've of

a to subside again would first margins quarter, start little the and Our then in grow. bit

phenomenal work. business in better year just The a We we are diversified expect an that to job margins very significantly has have job. doing that management they've there than and mix in Quite team to and XXXX full they're expectations had frankly, of our in business again, great be also what has a XXXX. done opportunity

Operator

next our Davidson. with And will A. question come from Brent Thielman D.

Brent Thielman

XX% dialog there? you Sprint/T-Mobile Are get to. spending. three need suggest coverage relevant I in of more need presume in to meeting year future? And more having mean active emerge some they'll behind that as Jose, would sort are months this customer accelerate they XG I some think to guess you a would for they Do that you

Jose Mas

it. there having was no have plans. remaining We both T-Mobile all entities, entire been with merger think of -- I question period. throughout activity dialog going the we are those about which and they build Dish, think to think We've them significant be the

has There's of lot be have great industry opportunities. to going The opportunities. a work. great We

achieve with in think to what I a think again, taken can we we them. the view half we've second moderate

I think related to that. there's lot upside a of

they as as we've ourselves it's their the part again, We've significant made term invested But alternative of over the in. about position the last think course years, carriers what long for of investments the best needs.

for think what lot understand the think I market. of They to that's And understand in position going a create us. carriers we our opportunities bring. I

or X.X don't year So first the of excited. how very again, half the in communications billion, look XXXX half second roughly, we're X.X if we to billion even the plan X.X side, at year. in Again, I of on we're the know billion the you guiding

first XXXX, we've year in we've more And second if XXXX, the the million the years. last few always five in half at than over years, done XXXX, of of about year you $XXX done consistently half the look XXXX, last

not of think that's If it industry, roughly in million for happened million and we second of all year, this that's for difficult that's half we've get the a to T-Mobile, what kind or to in Dish to more and to you got XXX the correlates our very stretch things look especially to, this in plans the unrealistic And relative at XXX with year. built them.

Brent Thielman

are today guess got this I given to year I leverage year, ask, next last M&A expectations is you this versus just and capital How for allocation? flow opportunities cash thinking down. the And about buybacks other

Jose Mas

We've We already. undervalued. I before we relative last the to of Obviously, believe we point thought week, significant way were we thought slowdown same the We been the stock. with in where our especially significantly is we the got in stock always under-valued. here the were hit where stock stock the very have, undervalued. we've think opportunistic performance points that made to Look, purchases is we've very the the

we're Now ridiculously undervalued. think we

we'll something that obviously a position and We these we'll as to absolutely at, on. focused think be value, it's arise. a create something looking we're shareholder take lot advantage great they they opportunities considering of be in So of so

Operator

Rygiel B. And with Riley. Alex question next comes our from

Alex Rygiel

it margins more first A than getting couple catalyst the communications. utilization of better What's that? it back above to or Is the quick on to XX%? it just questions, labor is

Jose Mas

it's revenues I think about Yes, in. coming

made cost to come have we've the up investments people little Revenues we've the a that I bit built that. think hired. based we've our into support that structure on in

good levels where maintaining been. margin they've job of we've I a So think the done

to we'll relatively a As begin see in soon think uptick nice we I it revenue, see margin. as in

lot right the a think well. corner understand details. business it’s So in our around really it We of I track we

'XX. would feel coming. we're but than we little grown to the in they is for going of confident here our in 'XX that's that did, were very comfortable to Obviously, expectations come something half more been very have it's wish again, We So it bit already. have second revenue a

Alex Rygiel

bit in and regards And a then Can from revenue you that the pipeline large the with the secondly to gas you quantify expect about XXXX, talk environment? competitive business. oil and little projects

Jose Mas

our and don't made of where that So in 'XX, had up any I our We significant work. 'XX it revenues. up we a in have dramatic project the single think 'XX portion amount making little at 'XX looking even and a that's bit of

you're at us. going 'XX, beyond if we in encouraging had but broad broad to more based for you that, I XXXX probably think a think based very look that's of same I MVP project, biggest was see thing our the

we’re we're So our geographic spreading risk, profile. obviously on spreading

lot level With of concern, I amazed not We're there's beyond that said, XXXX, there's a lot activity questions. there's a out lot know that. a of there. of of planned by the projects but for work just around projects

will more, going to that projects a lot expectation our lot perform. on not a and opportunity projects see big to the of just that's but So mega work have you're that

Operator

from comes Steven UBS. question next our Fisher with And

Steven Fisher

does regional project of product might big in or then a shift? extent mix that And approvals are they and what To what timing some change Noelle. assuming with these come reflect other of some of the that to wanted a that you that last mix you with mix about talk point could then terms you shift talking the that about about on really little talked bit if Alex about, customer follow-up were how you you and talked more when Just through?

Jose Mas

close XXXX. look the are We're we're being I with think margins in XXXX. business, we if couple of to generated consistently at what is basis it mix relative that margins points to that XX% good. to hundred in expecting less Obviously, you have going the

we periods, those returns risk good margins don't to a little projects the goes both improving the in oil and gas, that To as a the tend have. margins that in because be lower, second more that So up we you the that half, of much a Part extent by bit but obviously first year lower. is -- very exciting on. the time. reimbursable really first little work expect half, are have ends bit as in cost do driven being work the of quarter, we It's mix

We and really our good MVP stands, it's with the because So mix the that fact that the completely where irrespective Court some work happens about, is the a we majority get talk the and feel Obviously, lot everybody hurdles. of MVP, feel really we've got. great that on of to about really to to the press of we've that good of facing project regulatory to out projects permits about so what significant aren't one the permits. finish Supreme got do all in wants of these there's but even work

So that other of circumstance. dependency most will aren't back lot There's do. there's around And have we've jobs activity go the work. to But the Full some of a to part, a got project on lot to in completion that of most permits. jobs. these for

So good maintain of again, revenues the mix grow profile. margin us work diversification, good and is geographic helping both

Steven Fisher

shift in was But you did mix what year. different a customer be mention there way? just this I might was wondering how and that

Jose Mas

Well, because reduces have the business, CapEx. that there's look necessarily midstream company is, increasing I there one others answer our you've It are think CapEx. doesn't got because based a broad on impact always isn't huge

that the that others year. project hitting particular So plans in have are there's

of they later. year. They So a We've end for couple out. back the may customer They one customers. it's lot activity roll of years one following they may in coming big have roll a significant not year. done driven. They have up projects projects not

what relationships for we've think period them and of able been have sure out So front important that. opportunities, I of and customers time base make in with of and broad kind lots it's us do we're who's great figure spending have to and and to

Steven Fisher

How QX? on you they of kind communications be down up going And it in are expect QuadGen the with quick quarter? and in telecom. fairly do quarterly Or modest. to to a did backlog on then consistent I assume one quarter-to-quarter? fourth much basis Just be add to was bookings a lumpy

Jose Mas

over expansion I of further to big opportunities out necessarily merger, and us going the the not next to entities next the going -- that's for for It's depend quarter. happens further of the and -- of that's couple backlog is -- some post quarters not going from course on play think to for significant new come what

was it under For question, do the that A was small QuadGen that us of portion XXX million. do a for backlog. which anything work, lot our of work well relatively wouldn't as the to they

meaningful a backlog. have didn't impact to really it So

Operator

comes Bank. Deutsche Our Chad from with next question Dillard

Chad Dillard

can So they can side, to then about project about just the compared on of also wireline versus there that? XXXX? how's you about mix transmission that your wireless, how think pipeline, electric talk then talk XXXX And you and the prospects

Jose Mas

So for XXXX, we're wireline and actually expecting growth in both wireless.

on. lot I growth think we're fairly the got be wireline throughout year. consistent that will of working the We've projects a

be So half. half, really strong it'll both first second

is strong. showing think first in growth Again, I half. I more growth think wireless half, really second the showing

those continue very to are So we both of believe strong. markets

of second speed multiple to One lot reasons. wireless a of there's the There's lot got doing obviously you've activity, the lot for relative fiber backhaul providing a being a is but companies homes. placed for broadband cable higher to

lot there. activity there's a of So

a wireless the lot. we've On I side, about think it talked

period for a as of long plans spend massive begin have to going to XG. is they out time carrier every think I roll

From electrical side, business. we've an a transmission with done good job really the I think

I strong on expect think performed year. executed, they projects growth this we they've the digit double

projects month is said of George got that our lot actually we've fall a period. of strong. the very We outside -- north think got backlog I XX XX%, of backlog

a our lot very a have going So published higher to to which than backlog. our outstanding, to of of projects are positive total think stated number impact we transmission We've in what some considerably win is backlog there. got that and going is we're backlog

of think a about Gen it's the there. electrical very all the billion. being the of So that everything's transmission having working well goal We there. last in just $X Power before north talked We've do gets segments always of time we ultimately a of matter year, our saw

Chad Dillard

can the think through go cash we well you about year? about as that to talk just And conversion, kind on the then just just about how as of XXXX, as in think cadence

George Pita

obviously talked cash the about record year. we're flow We’ve ops from for expecting

we'll the to level significant DSO flow. in higher what be in still fourth did the but quarter, quarter, Our will we be cash similar will generate a first little

It's as of collections had this lumpy at two I ago course it'll and consistent. sort structural going movements we're be retainage and to be corrections as outside just that point, is it of thing. some that ordinary So think years don't not now issues slowed with when dealing maybe we that everything relatively was

cash little could we flow we Frankly, cash So no in did we bit done expect year question that a for as have better record well as on the XXXX. flow.

concerned. free in expect growth XXXX cash So little our of bit is terms cash exceed we once income. earnings that we our than grow flow And a should expect overall in that again, net flow higher

Operator

from comes Adam Thalhimer Davis. And question Thompson with our next

Adam Thalhimer

George, kind of QX, seem to I small stress Verizon think historically that larger used opportunity a wireless a you wireless in there? opportunity Is is there contractors and think Verizon good local for I work.

Jose Mas

George So that while. I you for it don't know to and a if been We've myself. directed saying

at very contracted the I fiber than anything. think Verizon one project project as that we they've looked differently historically contracted

around, I think what significant going that customer future. do the opened they're for with to the that's doors in dialogue

to it early is XG press understand what noise think, need gets much we is all as extremely an and I stages. irrespective

every multiples required what about to every, activity plan. considerably, to challenges And going out it today, think as give levels is to going build amount they carrier ultimately of that the is significant deploy of are which increase their

different think the seen today people relationships their create in really every exists different. to it for they've that to able and execute of and available no is to I is types industry to of there come So to and past take Verizon on advantage have plans going in the out opportunities carrier be and

Adam Thalhimer

the And walk so Gen biomass? you what mix business of us percent the Can kind we're between big now solar, of through, is Power now. wind,

Jose Mas

those? of each of breakout The

Adam Thalhimer

more little just It's big of add on Yes, a the piece just I'd it. now. story a color become

So just internally driving that business what's in on really some more things? color

Jose Mas

it. of think it's of I a Yes, mix all

business relatively great new a opportunity. us. a is It's for Solar

types else for to it's on over of Then faster. Our revenues XX%, work. obviously the the well significant in again, to be their piece of performing all mix mix All a business probably that's But of us. this probably course be And of hope of is solar so all we've the Wind year the continues well of a pieces talked new XXXX. the think again, solar. projects is very projects. growing It'll very is be executing mixes. a XX% XX%, of I last broad growing will XX% of related that balance year. business they're about and are Everything

Operator

And our next question with Eastman comes from KeyBanc Capital Markets. Sean

Sean Eastman

oil integrity, just segment gas and of The the replacements? is, and the quick stuff A having How work that more XXXX mix. curious utility main exposure the little I'm investment much community's comfortable of question, a to.

are can Just curious today. of what kind Maybe defensible sort type of strategies that growth of more is sort see we that place of in or what around trajectory work.

Jose Mas

things. solid. business there's are needs of parts about million obviously given lots also in being agree market believe agree pretty spent we $XXX us the the a One excited we're It's country million So but said, at we dollars that's a think is a that our $XXX rest to is, of different -- couple we a that's market. of business in very any for With We defensible also where growing others. point more that in time. market, that relatively

but So feel we know to I good market of maintain the our know to perform of that them, important between business really a distinction about and the term think rest it's to that I mention levels. a in continue there's you long the ability current

Sean Eastman

positive merger, XG around second supply these this the some but -- we've set we've corona potential so Sprint virus got T-Mobile chain which and backdrop is development opportunity just that. also one is then a got And around impacts around

off start get when in going of XG kick tower some is for macro a to to overall just to the on helpful sense on be just so an timing earnest? the And work update

Jose Mas

so of some depends carrier. Well, it what is on it started right,

or on job you to for look side. issue done think know, their their feel date. of we've the they what, to build going a other weren't of they've, for I in involved They've a So equipment good got we'll, carriers do. an kind been so preplanning good at think merger, when they're you We and set procurement XXXX plans hasn't where

to stopped a were they some guys the the relative significance they a are they've out coming of slowed the that merger lot that So of that, lot down. of doing work done or it

at, offsets know, think, XXXX. to we the there inventory as end think an we you there know, at which of So potential well, any we build somewhat was look as least procurement issues you

needed think there's so it's it, to we with the now it attention level. that, our happen are does and certain there it Beyond how they're having idea of all that they're being much an to find of customer to no issues -- focused issue long sources so types working it, alternate to end date. But don't right hasn't at industry worse at a what's if lot been customers going gets, on hard been equipment. trying in the of on super We ultimately paid that have obviously term and up

Operator

And our be Hauke W. from question final will Robert Baird. coming Justin with

Justin Hauke

for versus that of quick first in so revenue, here, just booked about gave left with that guess and like full ones I second the the you going percentages that everything maybe based and on how book much half just project? looks was ramp quarter. the or I'm numerical to client on gas curious, scope it part oil in MVP Two are you've year of That's your the of customers XX% else one is the I mean first base the ramp. on the diversification

Jose Mas

$X.X important part So We that talked MVP or billion what we about. of is separated awards works would of verbal that we our and not to in from pending had the that's consider and subsequent they're note.

expect finish going probably much We levels, specifics, XXXX to revenue amount but you not into job. to think of there's roughly that from We're if considerable the at MVP look I a get all that some in or happens to see and finish it say to left XX, that much of job customer. if versus we'll we'll How pushes XX I in that completion. probably think about

Justin Hauke

was bit that that second just little expecting. one assumption it the And like 'XX? looks taking are in what from were we revenue the acquired revenue contribution What's is the than you guys a more business

Jose Mas

to a you consolidation. revenue it'll of In the XXXX, just is portion and gross internal is under significant reversed if so that a on Tec look basis, a Mas but hundred, probably get at

$XX million ad, it's probably So roughly.

Operator

this questions conference our turn concluding for And no there I like are time. the any remarks. speakers at further would over to back to

Jose Mas

the thank our call. you us concludes and All updating to like XXXX our to year right. everybody quarter call. participating, we This during forward look year-end I'd and supporting for on first

Operator

and appreciate ladies today's gentlemen, concludes today. that once again, your We conference. Well, participation

MasTec (MTZ) 28 Feb 202019 Q4 Earnings call transcript