MTZ - Earnings call transcript Q3 2020

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Operator

Welcome to MasTec's Third Quarter 2020 Earnings Conference Call, initially broadcast on October 30, 2020.

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

Marc Lewis

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

Jose? talk and turn Financial today, and to now remarks These The discussions period, be last lot our so In VP have earnings the call our these we announces certain addition, minutes. Jose. in not section at today, call. us and or A will in a Chief Q&A Pita, Chief call financial financial to review Officer; had mastec.com. over Executive great to opening of we XX about financial the to this it can comments With and website George. a reconciled from investors Officer. GAAP by by format XX-Q the of Executive conference by will expect George We measures measures we our located be of financial Jose, Mas, located another any comparable measure non-GAAP followed use in of our reconciliation in followed things about Jose quarter non-GAAP may found our I'll be a most release

Jose Mas

challenging and like your through and call. Thanks, you third you Marc. are healthy and we I pray to loved today. continues And hope the to unprecedented and I'd the welcome MasTec's us morning, quarter during times that safe. Good pandemic. MasTec and joining as these thank COVID-XX to XXXX ones for excel manage

the of MasTec. members has I proud the commitment entertainment, and our time, been women the so have States this Millions our sacrifices, priority. United services help we men customers say, have on to safety resilience, creativity, communications, I'm rely of of During provide. throughout top inspiring. Their been families power, and other and the our team of

men to hard I'd women Our and team the of thank delivered. work. has And and sacrifices like for their MasTec

for on operations was end XXX and a I are and another a gas billion, And First demonstrated grew of believe cash $XXX for the quarter of me, at quarter was third year-over-year earnings X.X summary, quarter year-to-date, quarter and To flow Revenue segments had per In great billion. EBITDA the $X.X another is oil Revenue segments third the excellent adjusted growth EBITDA was we the XX% was backlog track highlight at grew at the the these million, our non year. was highlights. some strength of million, these for diversification. XX%. from MasTec's for segments. basis. on business quarter adjusted $X.XX, share quarter

a and growing growth telecom by and of driven the consumer focus the opportunities clean carbon energy. it XG the launch cable Clean the by broadband We and focus to continued energy catalyst and in tied on product. the home TV increasing includes and communication the expect catalysts fiber in carriers ever-increasing speed continued on both neutrality. of revenue of include and growth segments XG continued rollout both growth both of these earnings number in Catalysts a communication

battery storage, facilities, growth one expertise country, in in us solar biomass wind enabled lines, constructing market. of uniquely hydrogen our high farms, the contractors in and farms, substations, solutions this of advantage largest the As to voltage clean position energy take transmission

to specifics. some industry cover like I'd Now,

was XXX the for revenue communications million. Our quarter

in The of More working nation's our came highlight at and has importantly, the and at points basis hard with sequentially. pandemic up and margins our their XX.X% helped telecommunication XXX networks, strong importance customers reliable customers and high-speed year-over-year connectivity. were are providing up

promises I expect richness We week, core the element. on continuing our continue this to The be at is network earlier of a required its of city this times two Corning yet on the XG earnings said fiber To is to conference and of, expansions believe another focus the illustrate density will of there renewed of their the Verizon that said to illustrating fiber an than to necessary in in markets. call And September, made trend deploy in on XG. statements. AT&T this example quote, and CEO deliver fiber XXX up a CEO a fiber call week more CEO a residential

grow third MasTec's $X.X Couple opportunities next to opportunities XG think trillion. this last business. more to First, has we a the note can with consumer and five see not to one making three think segments key Verizon our as and fiber our important a you're over on of we're those both XX% important over and the XG. our are connectivity we to up And September, the XX of business. you all, use and distributed XXX% comments, and analytics fiber years, over XX% they Samsung and a more number the network lot us. two as that stated is quarter for on In phase out focus I be when become anything in the network of great last wireline it, power and to sure a priority around last into with Deals dissimilar. place. XG He us grown equipment network, I business approach it's with about year. dense core firm to sure network. $X When broadband US radios that this of XG to have years, continued that and deploying the about provides that over Based significant The investing something wireless deployment years important is take investment have of those in put these that estimates MasTec billion going fiber. make reiterated our And like to over XG the includes next that followed through in XXXX. one network he that you market the expansion the First much and serve will provide do areas, we very to very IHS to are business and with to place quote, need time announced deal That's

Over the expect to initiatives government catalyst coming two our months, business. we important be that will

bring to Fund is first of The from the rural communities. the high Rural to Digital internet speed funds award Opportunity help

we XG and is for the the a periods for associated exciting is history for to band believe MasTec. lead truly game I spectrum in consumer, networks of significant should entering second deployment The the the auctions wireless our expected changer mid those most opportunities of wireless telecommunications, this MasTec. the one technologies and of that the later of Both are year. and customers

Margins transmission electrical improved million the Backlog XXX was segment, remained our quarter. last to and versus third fourth in year's in year-over-year. Moving improvement expect XXX strong quarter. further improved sequentially, million and we revenue

system segment new growth as deliver We to important projects next as we year in of the for Scale are a we revenue number confident starting. is that we have can strong strive us beyond and achieve we which for hardening. well very and integration, drivers reliability, include segment We positioned ageing, margins. double this digit infrastructure, believe renewable for are the XXXX as intact, remain

XXX quarter versus Moving full to verbal And were revenues segment are the backlog to and our margins points. expect prior levels was and energy clean XXXX size over on, for expect year, million the coming this XXX for in in improve the approximate infrastructure year over a to year-over-year segment, over we hit Margins XX% awards we expect this revenue segment projects in we XXXX grow. by seeing to and XXX increase. at scope $X X.X%. continues continue competing the third strong we're basis and billion. million Between to record quarters to The opportunities of

organic have investments the significant profitably business segment We made through opportunities. our grow in to

for to that increasing We continue services. talent the demand meet and resources our

segment this it's portfolio. of still quarters, MasTec's I an part think more last the highlighted we've While few underappreciated over

Over the clean the few on energy of months, focus the course has last been palpable.

many We and have companies Energy lower others significant seen their planned carbon NextEra, investments in highlight Duke Shell like technologies.

As is these a leading MasTec uniquely and partner positioned clean contract from energy benefit to investments.

of year's revenue COVID and pipeline million, to oil Revenue last third by impact was in revenue both effects of oil our impacted and XXX compared to for Moving demand gas. on and million was segment, its the XXX gas quarter.

whose projects work the into major have been delays. our construction this guidance, begin While in quarter, to impacted have by expected the started already slipping projects with that third we two the regulatory of Those majority was into had was fourth quarter now XXXX. factored in also

quarter on third very of large Without for levels margin. reimbursements large at equipment delayed impact impacted reimbursement were a Margins that costs. revenue. small very are had activity project of quarter portion Looking results, We like activity. significant what represented the without representative project revenue the positively and strong would a idle associated quarter by believe these third revenue, of look levels project

quarter to we end, expect We gas as backlog revenues expect projects. increase with We number large quarter type And just a project increase. over billion. margin we have XXXX. third and been level Subsequent one and recurring the in smaller ended of normalized revenues to a more project $X.X awarded oil

only have tied oil over being the last the a As reminder, three with natural revenues gas. pipelines our come our of from majority business of to X% years,

for replacement We and gas activity. demand continue distribution to see strong services, line integrity

this to billion our two we to EBITDA XXX diversify on X change X.X I oil of in XXXX our the We our of directly is a and to XXX to earlier. of guidance to like billion. attributable are X.X versus our We continuing our revenue take guidance guidance to range guidance. to covered guidance previous XXX segment. million I'd million projects a cover to The million. previous gas Today, lowered minute in guidance revenues versus increased focused

start the quarter. was third the in expectation initial Our projects would

oil Our possibility our the I'd delays. account in the our XXXX, nearly total our strength to our midpoint reduction revenue million while showing about of range only will we'll revenues longer-term model. range in again, on also note an the further segments be like to like of comment half at gas and that of guidance the by takes $X.X almost I'd goals. our billion diversified meaning assumes down also grow XXX that into other

gas over to business about believe should X company, depressed mix, X gas are think on oil even $X.X and be transmission billion billion, on grow a path virus. energy quarter about a a to I billion had becoming we in Based we I communications have $X we billion clean billion and oil impacts the our $X As effects $XX revenue, solid billion a annual level are to we to that should our market think billion. in exceed to good future a and and backdrop. mitigating recurring the and plus recap, business revenue opportunities, X.X To COVID-XX confident of third

challenging these While and times always uncertain, arise challenges. from opportunities are

are help partners to models customers that ways to Our and opportunity. looking our their and change business improve strong lies looking them, are in for for

Our greatest needs. industry to customers' in and understand the been strength the has our trends

hard commitment I'll ability a our strength. Keep women the men to like what review. of again now their to has MasTec. and work. or their call good for been for MasTec existing for George? holds future provide Our financial the the the excited to for up safety, and whether over their thank always sacrifices. I'd turn to services work new I'm George

George Pita

current balance well expectation good morning our cash strong everyone. our guidance capital the impact I'll third including the cover the ongoing of flow and and Today pandemic liquidity. structure as Jose of performance, for quarter Thanks, COVID-XX XXXX as results,

discussion press of and non-GAAP beginning our of include $XX per financial release, beating our and results our measures SEC the at guidance results earnings our can better will Reconciliation details found In earnings indicated Marc and on on non-GAAP share, expected As call, our expectation adjusted with third our and by adjusted exceeding filings. adjusted our of EBITDA. be on expectation diluted adjusted million by guidance or EBITDA than earnings quarter guidance summary, $X.XX. website, were the

fourth and EBITDA expected lower quarter. by quarter represents in $XXX delays record startups Third which the despite that large oil impacted level performance, project of now initiated segment and have achieved MasTec a million adjusted than was was gas for in

strength, quarter As year-over-year Jose non EBITDA the transmission despite of potential note combined gas impacts third COVID-XX infrastructure to year-over-year noted, MasTec. in and highlights it communications, and clean growth on is basis, showed This revenue performance of that XX% namely and segments, our important segments, oil which adjusted energy the XX%. growth diversity and a strength growth and electrical of

strong in operations net in we also year-to-date investments. by approximately results by and XXXX of strategic $XXX operations reducing cash and quarter cash $XXX share MasTec Third repurchases have a from flow continued reduced sequential On million generating end $XXX since from almost flow cash our million. XXXX flow $XXX basis, levels million XXXX represented performance, approximately million levels level another $XXX million for net performance despite debt year other and record debt

results indicated to consecutive record yesterday's mark in continue the expect XXXX from As cash third will year release, operations we annual performance. that of flow

navigate strong resulting to we with in the in position, climate Regarding that strategic the our never is through pandemic. invest as us us advantage a well a capital have COVID-XX we structure, from my customers as economic been our full belief opportunities, as stronger flexibility uncertain affording giving

Now, quarter guidance segment for of our expectations highlights and I results will the cover XXXX. third regarding balance some more

Third down the period segment million compared last quarter same revenue XXXX of flat X% $XXX communication sequentially. and was essentially to year,

margin XX last points basis the year's quarter of point this and Third third revenue basis a lost communication revenue, to disruption EBITDA improvement related COVID-XX includes rate segment compared XXXX worth pandemic. XX.X% increase quarter. when representing sequential that It's was performance to improved a noting of XXX and adjusted

As to due has we have which to approval municipality in local permitting construction delays. markets been continue impacted selected activity

expectation fourth over year's of XXXX revenue points rate expect annual sequentially revenue EBITDA basis of expect margin quarter adjusted decline on two approximately the growth EBITCA segment strong continued with communication XXXX revenue. Based rate annual over to our to performance we past adjusted approximately levels, will double-digit and quarters, communication currently the segment We XXXX. XX.X% margin XXX slightly XXXX last strong slowing activity levels with in from improve

EBITDA with margin pleased in adjusted improvement expected considering particularly rate the the are conditions. We communication challenging segment XXXX

workplace We technology our effects the for wireless to and with of in XXXX coupled XG wireline continue US begin COVID-XX remote increasing to trends significant drive believe beyond the towards diminished because normalize. demand will pandemic that the and the evolution conditions and and education pandemic COVID-XX in services as long-term

large compared gas revenue to to period was projects segment $XXX expectation and same fell delayed Third Revenue and startup quarter selected XXXX of oil the on XX% short due judicial last regulatory of our million decreased as year. activity issues.

size in monthly revenue a given delay impact project to reminder, up activity As the projects, a million. can of our $XXX by large XX-day

between on now presented As revenue accordingly, billion in winter quarter billion. $X.X quarter, segment or challenges, increase And expected the we level. indicated approvals and of judicial on exceed somewhere and and weather final XXXX Due quarter expect XXXX annual oil our two fourth $X our range onset release coupled gas projects. levels yesterday, the of XXXX revenue with oil gas impact is the during regulatory segment substantially fourth last volatility and to large and to a gas the oil range fourth in to quarter of expect to fourth we've initiated potential we revenue startup activity and year's this

oil have Third Keystone growth quarter gas strong clear significant was this approximately pipeline quarter and including announcement $X.X segment. billion. continued the by we TC In segment recent fourth revenue into backlog XXXX Energy. award in summary, activity, we visibility have XXXX And

changeover revenue. recovery of activity equipment strong as This segment idle approximately projects, and contractual of delayed trend Third the for for costs. combination selected project was numerous adjusted fees as points performance and other on smaller across pipeline owned rate of XX continues gas and margin quarter recoveries of XX.X% project percentage the and XXXX benefit EBITA oil the our closeout well

requires in and and costs primarily oil And segment fleet. these gas investment adjusted As expense a reminder, reflected below significant the equipment depreciation capital EBITDA are the line.

EBITDA Looking forward, and mid margin into XXXX, an in continue close adjusted the out will oil anticipate quarter as fourth strong range. we XX% we with trends gas segment expectation the

to fourth year and adjusted generally exceed approximate the increased last XX% will anticipate was million approximately segment segment this quarter. Third for to segment quarter rate period and results X.X%. EBITDA approximately margin the revenue slightly quarter electrical transmission compared $XXX XXXX same third We

Third XXXX supportive backlog EBITDA And for at continue for expect this margin strong quarter market to strong rate revenue, EBITDA adjusted growth. that XXXX $XXX are million. adjusted and we conditions remained segment

quarter segment to and compared Third XX% of approximately XXXX increased the million infrastructure period energy revenue clean last year. $XXX same

XXXX quarter last period to the a Third adjusted and XX sequential basis increase point a year. basis EBITDA rate X.X%, was XXX compared increase margin to same points

two exceeding quarters, quarter. for in digit range. has our And the segment expectation to reflect single this approximately generated revenue rate this with margin last $XXX During each longer-term high EBITDA the trend adjusted million X% this segment begins in

to range, mid to which close out expect the annual annual equates revenue an growth XXXX segment in range. the We with $X.X XX% in rate billion

annual expect year. also over basis that will XXX for this show adjusted last rate We segment EBITDA XXXX margin approximately point improvement

continued period As market. active in X%. totaled of we as XX Jose XX% the now remarks, growth and percentage for segment customers a significant approximately services basis, approximately offerings install-to-the-home a will of this a of indicated in service revenue. expectations for energy summary these in three I approximately our beyond wireline largest a XXXX revenue. XX% discuss XXXX clean his very top our combined fiber separate in quarter derived wireless was AT&T third total revenue, and On and was from have

organization, Highway managed energy it Verizon falling significant a WhiteWater these Corporation highlighting once our and X%, and that Permian revenue, each a Group us independently reminder their service where Comcast basis. are giving construction and Corporation X%. Communications universe. Energy that corporate Xcel master Individual and important NextEra projects comprising have budgeted within we our was each with Midstream comprise on portion AT&T Affiliates, is of again of while Duke under agreements Iberdrola a revenue derived diversification that to X%. pipeline, one note XX% offerings As within were umbrella recurring Energy Transfer was XX% Energy, X% corporate

is as of grade of we it all our in represented worth quarter noting that customers have over top XX% profiles. of induced a our uncertainty period Lastly, operate credit revenue, investment macroeconomic COVID-XX XX third

Now Investments. as working flow, discuss usage liquidity, cash strategic I our capital will

equates comfortable of as the the and defined debt, times. to XXXX, million in of plus $XXX third X.X a which from $X.XX cash very quarter of ended During operations generated quarter ratio net billion, with cash debt flow total book leverage we

reported our capital record we of As we hand, liquidity, structure quarter, favorable and plus the also have a senior cash as billion. as as defined $XXX X%, well X% with $X.X X% we the with approximately notes strengthened during cash ended quarter refinancing availability on million in our previously borrowing and unsecured of

million, first months $XXX level nine During from while levels operations, record debt still reduce investing share a we us net flow million the and approximately $XXX generated allowed $XXX cash which by in repurchases of strategic investments. to our XXXX, million a approximately

XXXX, X% base, quarter. During in our X.X vast first repurchased the of of or we the share nine million occurring with activity outstanding first approximately months of approximately this majority the shares,

capital timing authorizations, today, during our repurchase ended quarter. share currently expect our quarter. we out Depending We repurchase revenue usage quarter prudently program, balance share million we the managing any DSOs program our also XXXX. warn, close in five Regarding the executed activity, XX open in working fourth not the we some as have and repurchases days to last as days, while $XXX of modest of on as opportunistically fourth have conditions down invest this with from quarter sheet. at We anticipate

cash no with performance. the will record expectation from interest record near-term low at the of annual rates, to ample expectation flow coupled operations extremely of places XXXX flow consecutive MasTec's structure, sheet proud solid cash an summary, all that a balance are We liquidity, our and capital maturities markets third our In XXXX of year mark strong opportunities and take afford advantage position long-term significant any us.

XXXX, quarter, million CapEx $XX cash third defined incurred an approximately incurring net $XXX to we the we in disposals CapEx with anticipate be as under additional finance $XXX $XX of cash during spending an incurred incurred $XXX cash net in leases. approximately under million We capital currently net million additional leases. and equipment purchases million of Regarding CapEx equipment million finance in to

levels forward look to XXXX, date, the we we have CapEx XXXX on based As compared made XXXX into the will decline expect when we levels. significantly investments

our between Moving $XXX billion range $X.X diluted quarter adjusted is EBITDA share billion, per $XXX fourth million on to to adjusted XXXX our guidance revenue expected ranging to to to expectation current between XXXX $X.X $X.XX. with between guidance and earnings $X.XX guidance, million

$X.X the annual of your line share $X to as revenue expected to as $XXX to well items interest range are expectations XXXX as XXXX rate with are XXXX, shift EBITDA EBITDA These to This XXXX segments, billion, two million expected well adjusted improved earnings expectations incorporate margin the We guidance between project across depreciation, EBITDA and multiple segment segments. word on diluted of revenue on taxes. between oil impact such large between $X.X projected into $X.XX. strong includes projects adjusted lower improved to range projecting multiple income as billion cause and adjusted $XXX activity range XXXX delays and as per across work regulatory lower the and as below to slightly million expectations and adjusted performance expectation gas

to annual executed interest approximate expectations. have lower repurchase in release including previously this expectations $XX guidance our segment Based cash XXXX as and we our will recent our only we color activity senior to nominal to other million on rates levels interest provided level notes As briefly XXXX I expense yesterday. flow, expect with as offering, expected share some strong cover highlighted date. now

XXXX purposes modeling XX impact full million approximate full XXXX of our for should of estimate will share is share noted It year XXXX now count million share shares, for be count repurchases. end Our inclusive year that each XX.X valuation shares. the

acquisition and lower the impact XXXX capital of through the combination depreciation approximate and expected X% expense to of oil additions XXXX and expect timing revenue annual of activity. We levels revenue gas

tax tax income concludes fourth annual will XX% This to the higher slightly annual adjusted the rate. we expected with be XXXX our rate remarks. rate quarter than prepared Lastly, our expect approximate

now to Q&A. for Operator? We will the back call the operator turn

Operator

Thank [Operator of today you. Steven from Fisher Instructions] question Our UBS. comes first

Steven Fisher

Thanks. Good morning, guys.

Just of types the the the competitive start changing wondering little that that a asking really size projects working the the on kind that you energy opportunities, on get to And of see to and business, some just size cover you're about the to have target and how you're bidding projects questions next of bit you what into landscape looks and the be to to you'll competitive kind targets projects you just XXXX in assume we to over think of about how there. kind order talk years? like book wanted landscape couple can for your need can and that investors so clean 'XX off how new that achieve that targets, I the about one these of of get confident you should of of today would what that

Jose Mas

you so the we think as Steve, think where most about Yeah, brought I right part, important is from. business the

year, to about X And few should $X.XX year So we X that this plus. years a just next we business and were exceed growing ago, million business and $XXX eventually billion. a billion approximating we're short talking

So of the in last we've that the comfort what to right. I years, been think deliver come couple over should able

our proven to we've think I So grow the business. ability

think of bid schedules any think we seen we're opportunities to frankly, years, of It's right. the number the with market our growth few rates been the there, grow question as that to enjoyed the are And number the that the what close, and there's I we've it's and quite I opportunity we've last right. mean, becomes that's that I there's at the look in a ever any you significant in out is and afforded at as looking the seen mean, even past. level increase like? over don't worse market, us that activity. projects the never look at potential When I the look question continue Now most piece, important the market the

Historically, us a right. that this wind with can were entity. our large relatively share may We of started just a comfortable winning short we in contractor. feel those being much as So more that fair wind as business, remember, get we order. you diversified levels to business Today, we're we

business projects. going other got solar is wind with in are business right. will portions wind. business the business started a size ago, probably much we're our Our of and maybe the the focus added year still a that good that a reality business business just that continue ago, that's the exceed slightly to But We've grow, we about the really over a business a especially associated wind capabilities, the energy that to them. is in faster, seeing growing year of coming years. think and we and to biomass 'XX. driver We've that's grown worked come us. growth is significantly with a going back our the on to versus year transmission for It's going on us have fantastic bone substations a side clean supplying open storage for worked the in big battery our a We've whole slew on We've of XXXX new for technologies lines 'XX capabilities, which

So market. very robust it's just a

focus I clean clean that. to be move on utilities their and their that to we're about of as energy you every one see the big continues And energy. happen, talking a large going beneficiary think of to

Steven Fisher

still helpful, very still lower. but for That's like drifting clearly, seems gas, businesses, and as your oil in robust opportunities backlog out, lay of the there segments are particularly bit these it outside some a really you and are

this impacts is it we ramp more why Is permitting there holding do think to could of up when confidence, COVID inflect see here, start when positively? release in kind a economic And this that can backlog? that is? you it see we what's the So back and

Jose Mas

going of going, right. isn't to always Backlog a of issues backlog timing-based that with said Look, where we've our is a measure it. business has lot be consistent

gas where we oil us look of strong generally It and peak isn't to The at our work backlog revenue quarter us, Historically, a third for backlog because add quarter a the especially of our if of watermark is for at a our high off, levels. backlogs, quarter makes third us number across quarter difficult timing, business. for right. so outside backlog most levels, which quarter was the it's businesses, the those the you it's it

of benefit that as can we don't an on we're where we're seeing investor seeing the negotiated trends, projects, have what We from and we're tell is on, whether I what that of sit verbal you awards, bidding levels. you energy, seeing that never we've it's think got to us bunch I when to we've record had; clean we'll be announce coming in that backlog A, that the you take about able quarters will think a projects

our said we think in remarks. prepared that I

backlog it because and we're have question we it's levels best customers. no might time, what see be of exactly we happening to end. quarters, slipping happens that we frustration know in know talked expect is well long backlog expect yet that's We by what's in it in hope and been have for to what's understand communications. happening. levels. also you but And know but a incredibly to expect coming. that QX, about When clean come. year coming, we think I that coming The something And to there's We the record We talking energy We're market some there's I But record right. what's positioned.

as frankly, convert full are what before it's Transmission, business probably notice and you soon in that in think to gas time as matter And sounds, contracts, big a those we've got you're up some good our and oil pretty crazy contracts big quite I backlog. quarter. our numbers. in a awards where backlog into in as year should as to it limited will market, see good So of proceed despite we've we a be see it very be pending, a end, got going increase

look headline backlog, we've than position as opportunities that are as been great reality front in the to where in the albeit, is of not better that may So relative a a today never the we company, are us. on

Steven Fisher

Terrific, thanks very much.

Jose Mas

Thanks, Steve.

Operator

next Andrew Kaplowitz from of Our question comes Citi.

Andrew Kaplowitz

morning, Good guys.

Jose Mas

Good morning, Andy.

Andrew Kaplowitz

a growth mentioned somewhat for communications Even revenue made million just underlying you good. Jose, $XXX I in sticky the when while. has been then is and range frustration its relatively

half here? really up? high get recent what whether conviction you conviction, point point the think you maybe AT&T 'XX, they unstuck really good had, you've longer have drag of that you get Is break T-Mobile can it pretty at do the So out to of it's ramp that first sort taking of where you range? What's the permitting, that

Jose Mas

Look, my already high, is conviction right.

year, got right. living I Verizon We've that - that first, getting right. of substantiate the you're customers and numbers counting hope we're living understand Why in necessarily our from but is normal, think of high. you've in its I it XXXX end of the completing right, A is comes different I are all my my AT&T second phase that that their the end clear on got Verizon, auctions conviction or is construction a year the of wireless to future. its the and important an of that both to So not the what first impacts conviction are don't that seeing, it's phase, ways. of its - at moving spectrum growth part through in today, the COVID is affected reasons, We're in have bunch high?

half have where think some our better, doing that relates year, from seeing happening, second to the others a - business I right. You things lot slowdowns slight of some right. we're are in With the customers that it are as are

within a communications got So bag mixed we've business. our

were quarter, If up revenues, year-over-year our year. you Comcast in the at look up XXX% Comcast our full they're revenues third XXX%,

put some to compete happy make T-Mobile, work able to XX to makes it But those those that for perspective, level. break When not top T-Mobile customer, different it a we've XX very markets. and in really other us a about XX compete They made XX out been important it fight win doesn't T-Mobile To although Today, in not the what What and out our a contracts market-by-market of of have like T-Mobile priority we talked markets. our has in and or year customer customers. with They're were frankly, started, we're we're is national we actually quite six at one, markets. we've our of in accomplish. You markets. XX work. pretty

markets, goal? markets number of to the work we're goal and our ultimately is what's of expand win So each in those that in. Our more

where increase from So total inroads, That's That's quarter approximate huge we going are the in revenues. and a where fantastic. started I the of company from think T-Mobile revenues think X% with we've fourth year we to we've made been. great

break you customer-by-customer. So made have doesn't - to progress think we've right. It I a out there, lot it necessarily of

they're our I break to think going shot to next year, hopefully a XX. have top

that very with So did the XXXX. progress in tremendous we customer that's little work for

I going next see to we've think been. you're year versus activity AT&T levels from increase significantly where

right we going enjoy get Dish, to got opportunities And wireless that some right. significant of the lot But that you're Verizon, plans they've even Dish of done going we're forward. know same going see think to a to with I this some and the year. Verizon. hasn't from

coming. we year to on a going look time can hold leader of right, but you revenue, evident, fulfillment it's grow. are declined and as you given, think with wireless, at have our what's own a look that is the us have a numbers, One a for We to wireline that We in that and potentially understand first business, right. customer, be again. we're about We obviously, even I be things think is our our conversations So we a think a its market significantly be communications When next know that's we segments. we business. market as in quarter-over-quarter that's know business And with to at actually both think those that huge going there's you leader differentiator. the some

think a important. going incredibly And be I very what's active that super that's think positions very, well market. us for to I

it with conviction, going high it's say be in I So to steps.

we'll And of jumps of five I long-term quarter, course where of a be that's over periods going double-digit communications double-digit think have where period step by going And there's we'll have next growth. three growth, time. long then expectation years. significant to particular growth to a see in the followed right, we're time the to over solid of in my

Andrew Kaplowitz

in of you're work, we obviously, helpful. we a talk helpful, to you in add of like have type you going And sort and bottom, last mid-size out your may, sort be very if quarters, of kind 'XX. sort oil of 'XX. the I is all are, over perspective along then 'XX bid small here, its XXX updated when like would look for and improve on similar customers Jose, would large your can go I million work Any of If kind to few gas, so as segment, to we out perspective the from pushed of averaged bouncing you a question into project. your a few that and and we And think then maybe quarters, at project 'XX more large

Jose Mas

Sure.

to So personally, to believe do today. that understand the exists that play going we'll going it's is MasTec or convince that the significant for challenging I oil a time. backdrop I long be one in play challenging not said - and is is, think sustainable to period going see market where I for I'm I us market, QX for out. With understand gas that our gas long-term, right. other and it's the to it's level way me business, a us believe be that contributor recover, oil and and to for I of the I because it's out, going the in that a levels going considering in it's to believe This in

in know in demand weakened we are think brand that market space what we've market, down try to And levels point. what that to in - last a give we in months, going let's and than trying to this been today, that really be few some price to people going and there's better of would do, out point, are stays is market, to improvement continue we're all view in depressed a some assume look MasTec assume going great weakened option over continued it a gas recover, just in right? the course and it I industry. today, in let's look, think that And the as like business. trying point is and a at is on what that what do We to of it business? working the oil to better a I'm But but gas be price it's sustainable. that to think is I the going tell assume value, the turns still If to to oil let's So the be we've is roughly trying We're a a to right. market call, oil gas than right, I considered out. that laid we're and and be think

known. I think we're well

it's business if - we're But the we're beneficiary to that business better, gets environment. we business. plus a billion in a view margins. to a of that view, of to And like think going the a can revenue think we're going what the be give can We be right. big trying still think depressed view, in achieve $XX company, looks we even digit I great double we

times EBITDA; are If of nine you million of trading today, Even right. are at million look we at peers our with guidance or greater, our EBITDA, X.X XXX right. we're where at trailing trading to XXX

still Therein MasTec. up bad. if gas I good execute, increases. as and about If and and price even right, prove we right, better, take lies that plus account, as or an just potential think point feel opportunity increase MasTec for oil of I of how the turns And gas undervalued to story irrespective If our $XX we'll right, there. that stock oil being price you further relative you that's time investor, and into that the the it dramatically But for model, out rest business. doesn't, that we and think our get valuation we're over that

Andrew Kaplowitz

Very you. helpful, thank Jose,

Jose Mas

Thank you, Andy.

Operator

Dilts comes question next Nicole pardon me, from Stifel. Noelle of Our today Dilts,

Noelle Dilts

good morning. gentlemen, Hi,

Jose Mas

Hi, Noelle.

Noelle Dilts

XL award. congrats bit given just first that is Keystone specific, on TC the announcement little my a energy question and but So around

into about Just you're challenges given probability again, of and if the backlog go more job next quarter? moving curious forward, regulatory expect thinking that how of see we kind that to should

Jose Mas

XXXX, gas for next I to think be we're look, about and talk going So oil up when we right. year,

I Just that up. which current increase current very in see backlog I of business basis. business backlog, not on the our in our be it will wouldn't how difficult a year-over-year our to find based project projects mean, is on

and grow in they're where that coming, if everything if participation about we'd to our moves bullish The be done like is we're never gas we're more not, point We a - in to time think I don't about the the going going oil we're we're 'XX. and there's guide $X XXXX, individual of into And work individual it what for going routed pending thinking know for could we're whether But going project, project, reality assuming excited any the take that, to XXXX be XXXX. any is of it, sure. bunch to than a all we obviously get got you or business to think we're and am to to project. never to in build I to the on levels. 'XX still out to based they've slip to think I with project forward happens reality to there's billion some we've almost going lot as think that more going a Keystone that. tell is, that

Noelle Dilts

Okay, great.

But peers more update, who bit about little more more. a M&A of repurchase your you upside. you're some in secondly up a thinking could bit know little potential the and us flow the also represent pick may a of that market about just an bit depth really spoke targets So And struggling share then the on if environment on opportunities balance current others and generation, stands bit be is some a where how strength the you your might give I given cash today, sheet little call. yielding to

look kind Just and think curious of also as are markets you you interesting which forward? most

Jose Mas

where M&A negotiations has I there's in in more we time discussions see going business we the potential and it forward, that marketplace, seen you are with last analyzing can't haven't as been I view lot do been we you exploring in think in today. Look, extremely out are more XX the years. and the as share we've reason can that active probably remember in and tell a we've the months. And last of do active we in the partners, opportunities and very I a how buybacks a us to

that what we're those we've on. to and our the liquidity we take deciding for tried sitting with think So reasons, time I do

there's bee a I been good So about talking We more coming be we the it take probably deals targets. do Obviously, couple around We've really than quarters these decisions them. and in quarters. time, acquisitive to think seen we good make you sure us a to and us lot while. of in expect interesting can want think of you've make a

us footprint. very in that some because, it, really We see continue to good really gas. we're level to of attractive evaluate MasTec. and faster. where the probably to of think exception good M&A we our for would within we've activity to And the we each in are to the to of offer of last we to grow get services geographic and targets few oil has going customers to different can and we're course business, most the going about of point of And those be sprinkle opportunities the continue our I with segments, years. to these that's entry over add grow repurchases, to all talked at growth going valuation again extremely active us say there our been share - organic our there's we're But to able We our an to trading is portfolio, do opportunities think grow our help to further segments.

Noelle Dilts

you. Thank

Jose Mas

Noelle. Thanks

Operator

Our next comes of from Rygiel question Alex B. Riley.

Alex Rygiel

you, gentlemen. Thank quarter nice

Jose Mas

Good Alex. you, morning. Thank

Alex Rygiel

you I that's expect sort top XXXX. growth how And you to when assuming say to line. I to what in is on focus Jose, versus us XXXX. suspect growth therefore XXXX in XXXX? in give of think somewhat hears areas the morning. you EBITDA versus are drivers Good on EBITDA contraction think XXXX think market about few everybody a EBITDA maybe think that the everybody's about to the struggling I with Can you a modest in

Jose Mas

expect don't Look, EBITDA so 'XX. I would say that in we to contract

and growth from We right. that expect versus 'XX. 'XX takes in puts But there's and EBITDA gives

diluted in length the of on that's to nature gas We've how talked 'XX. and to think 'XX was a basis I and plus do down some EBITDA relative come projects bit in a larger little about will it the So cost of year where full oil at some of margin.

this range right we the 'XX. about us is think nature, achievable think we've high business, for the and oil long a as said gas think On think range I w to So our in we teens business. longer-term about a for and that's time, that

really couple our communications have strong, think I right the margins quarters. last been

I full think 'XX. about double year the talked hitting we've in digits for

quarter little bit have was a improved First further a the quarters lot. down

to we up improvement have expect to back do we'll ramping in in 'XX. 'XX. I for see start slight growth think But

'XX, that to know expansion what in 'XX. relative in I we margin saw So don't there's much

and margin of to we businesses further energy see in have a coming expansion we'll growth basis And both year are on relative our a 'XX, obviously in think I where clean lot full transmission we those. from today.

think I So that all adds up.

in our be guidance, pretty again, 'XX a slightly giving to margins total as expectations in a company 'XX below And think But our to versus growth today. ready I be view 'XX are EBITDA to but from would with give decline expect I still of what we of not So where where guidance in 'XX. that's darn they expect they some see 'XX perspective, are today. not we're strong We're to double will digits. I would from are it specific

Alex Rygiel

think there are? hurdles around for price at some unwilling been do Is points? for What shopping what's holdup? Are a you've taken lot The time It a acquisitions? Sort sellers process number competition sell of acquisitions. sounds you of of like some low the to has here. of those

Jose Mas

things. of couple Look,

record in of acquisitions very made. I being we've have think successful the that track we a

I that upfront, right. understand to We because is time us, we bring right. our for to we have reason table, think make something that take we the have sense the to

a have end currently think that on what acquisition successful it to I plan not. ultimately is planning take have to that where We is, we and front from the makes can the it process company where get to how or on

grow at our taken multiples, So competitive than there's going not those the there, transaction. and think and X.X to have. think not It's are for market, in we've of of kind past. be engaged that see times think to see out are for is very we're there's highest tough going sell we're trading lots probably some, shopping think money companies lot others the I front of that a we there's It us I we for companies business for to vision companies for of some them. sell that us can that how business that, potential right. their those in obviously successful longer always there a what's are in multiple, and few those at That's I operators make been have we to help they And although and are willing the the of reasons

I we're a it's long. I doing I getting we're think or function think, of taking - don't again close, wrong too anything think

is us a time we think to make would to I for take are term. long we the just acquisitions going that make this that that customary work sure

Alex Rygiel

Very you. Thank helpful.

Jose Mas

Thanks, Alex.

Operator

Our next Suisse. question of Cook Credit comes from Jamie

Jamie Cook

margin guess growth placing identifying platforms business I delivering certain obviously, have early company but Hi, sort I your profile. nice about to value, good shareholder obviously, higher done a and morning and been the next the good of the you've of are on leg strategically think of people quarter. on others. is asked, Most valuations job unlocking questions the with parts Jose, relative

as to vein, transmission figure expects. initiatives oil it an to people a on of improve multiple? temper your that back your there oil it's that and is sort put a somewhat sort of does sort in way manage oil communications downturn, of is let better to clean is the cyclical and the ability that infrastructure So in in another Or for is whether and out higher any or more you market that market story the energy of strategic gas and gas business, Thanks. come valuations strategically gas of growth or it's than going to is

Jose Mas

I to gas. And So We our going very to Jamie, that has overreact We taught understand to exists right, there that oil With me of and important, right. is, that trying business years be and the my understand long pitfalls our right. and potentially market. concern understand potential long-term, experience are manage said, the business the with time. think a over challenges period what don't that's we're the over

I us, the and So for phase strength within right. component the people think the and it first to of business oil is gas diversity comfortable and with the of and recurring nature it, get

it's business people of get convince if certain we right. what's execution more we can it level that will sustainable, for in of And portion in people get maintain over cycle, of valuation we that a that business, time irrespective pay high happening will that. revenue the right. can If through So we a the for

of that portion good falls into a is category. there that business that So

to to evaluate the be demand that part business, a Up take want much business, been right, good around date, think our can. to a that come all we've been well. in margin competition prove of time further we're measured not been and it's think create increase longer in I relative business, there's business to industry, be shareholder do to ours. of and it's able also we're for to grow pandemic, out. going going dramatically going I it's which I a we of I period back, to and time as business, it's to clear, as that our business like not middle good good be in the options meet very that may in name meet to think middle react a couple time, not cycles - think Ultimately, important less it that and as the an approach. the we companies been value of I in that will challenges and going will is to years over of think to we're the react, opportunities within next issues our a going a our we going Again, over got brand, we've but

look, to articulate be valued portions So portions business we're exist be And that. people that of seen cycle. watching here, to think we're early. should - different of that There's overreact related the often, with it's we business. it, there's the I we've continue And in the We can over think want to time, that And But we we that understand know issues it. ways. right. too valued we it a understand going should but play story within the concerns macro

will ultimately time So, do what tell that. we

Jamie Cook

color. appreciate Great I job, the thanks.

Jose Mas

Thanks, Jamie.

Operator

comes today of question Thompson next Davis. from The Thalhimer Andrew

Adam Thalhimer

Good nice quarter. morning Jose,

Jose Mas

Adam. Good morning

Adam Thalhimer

diversifying wanted O&G. to about I talk more

of billion, would low recurring be maintenance work? gas end the integrity long-term and your So oil of of of goal or or kind much how that X.X

Jose Mas

would different - see going projects, - distribution parts pipe We're in in to would we'd related related to be in as the see going when market see about think right. that I base the a Texas, replacement is just activity then may significant there's balance other of you've to what I like happen the slowdown integrity work. basins. related projects think got versus be different line recurring, projects, see is, in we're and basins, it's in We going but think XX% right. on think portion so mix, distribution I We're specific of that that, base think XX-XX we right, a a Well, work more significant I the

So That model we've for up is as equipped business got our to to think opportunities be different coupled the to with they more I ready. in it And basins. react pop well a our activity project sprinkled business make what distribution over time. long I oil think and model, very of of time. over type gas some is We're successful a period larger in

Adam Thalhimer

well. I the strong about them? pandemic could companies was about a then, from that as that, other there. general, cable growth if larger is then cable as I because And talk talking a Comcast, to just hoping so of was part that Or ask program? Is to programs a wanted potential the you're in and Okay, about opportunity you response

Jose Mas

relates it geographic. to for Yeah, its us, as I think MasTec

a historically So today, them than more lot we're for markets have. just we working in

that ability to with So I new areas. our customer it's into been grow think

think don't pandemic I not - it's So it's related.

us I grow. really a think contract ago. we partner There's where been X were they think Tier to as grow a help trying we've business it's our viewed I couple years to And them. we - with signed initiative been good a them with an

double the and at going these digits at levels business foreseeable to levels, to think seeing, to high. because continue, on strong I are hopefully, you're that, is not these that continue with for based So we're future. the maybe I we're our them think, growth really But going grow

Adam Thalhimer

Thanks Jose.

Operator

Our next question comes from Andrew Wittmann of Baird.

Andrew Wittmann

questions guys. answered. something clarify out found kind did I'll thanks a taking Great, for to picture and But asked question, here. a bigger give little I bit you been my want to lay of chance that I confusing

in they're now segment projects mentioned the of start now. that starting right going oil You the they're but gas and didn't to large kind

mentioned You quarter range the in further that also the contemplates fourth delays. here

a you hoping I'll thought little So like bit it's clarify a to what's it there's a confusing this you - and give that. but for reconcile potential delay then could sounds moving, chance

Jose Mas

grow XXXX will I life, at think right, that We're dependent projects. We're right somewhere how it's how two to we number from projects we XXXX the look, may people you activity on put be to their when may resources, on going we so going we those quick over quick away. peak levels people between on to be about year-to-year XXXX, projects. those grow grow all XXXX, those currently on XXXX at about Yeah, to grow those to ends, people think

stop think lot the access that of are there That's those of projects full is work on intelligent, get order, they to projects. it got much a really not self-imposed could, that wasn't full project was right. ability but entirety that to areas, as to I of a typical, - it work they stop to work note to things some need the of had there's one most to the as us progress down order probably a always the certain have was to the try missing the which in customers important to it's on we whole For as self-imposed, a mandated, those they project still work, available work part one shut they

work work off there's now they've lifted a to that self-imposed So of do. order, significant amount

of jobs we we'd get if end full the up that higher to gear think man I and could the range. probably that

I think been we're happening cognizant of these a time. all in of long for period jobs what's

our trying step take at time. and us both to one a customers So it we're

in on number people ultimately range. what kind roughly what between end in is it to That we To XX% difference end. up of need substantially is the revenue going to the going that to dictates at range, So where project grows we we're and that that's grow year right, the our today. level be of now

Andrew Wittmann

all That That's makes for sense. me. Thank you.

Operator

Sean from KeyBanc comes Eastman of today question Markets. final Capital Our

Sean Eastman

for thanks gents, taking Hi, my questions.

Jose Mas

morning. Sean, Hey, good

Sean Eastman

million revenue relative wanted where I Good morning. the business today interesting, like segment in in XXXX we gas to targets gas revenue profile scenario you super and what and also the expansion sense given just the in pretty billion non This ambitious in in some on to get today. margin margin XX just is looks oil highest have the margin is a revenue XX But that stream. obviously. are oil

So sort put together just trying that EBITDA power the of understand in scenario. my and in to that head

Jose Mas

over we high our Yeah, Longer to long-term over I a and we've business said. if teens. changed what sustain it it's think we right, mid we break set buckets, think don't can term, oil you gas in

time, Our about communications business, cycle, We've XX. XX clean exceed in talked being at double double transmission the digits. it energy think last about ago, we talked right, cycle. we've while digits, said we in we expect to we've hit over plus a at be this being we can

add is a look it's at compelling EBITDA we're up, a story. those it's though margin a company, and very double-digit but we at think today, comfortable, between So XX numbers MasTec those XX Maybe all the billion and you $XX when levels, not and plus can right. we're you that hit that rate at that I somewhere

Sean Eastman

that that's driver super positioned Yeah, second uniquely And important a energy. growth being for just a in that's of algorithm. comment around clean me, helpful. big Clearly, one,

just on to that positioning expanding competitive little on differentiation, color, the unique bit just wanted So just I more a get be their would that position great.

Jose Mas

look the the business, we customers last and that three years. customer the at right think that with Look, grown we've base in you enjoy I that when over

number three we XXX frankly, XX% of important, million think that, and is the growing within of the laid years, when to target year, billion about base growth spend had. just already we've I comes $X.XX or X it's historical which So you that past means growth from, customer think years to four a context I out, over billion the again quite further talk next it the in that

our and those at today. of in grew that significant we out So their - time. top over If double-digit stronger to list, spend, strong right. look those customers just XX our very, Much lot increases energy clean expecting they're dollars you of have rates to have it right. we add a very players market, the But ability in what grow we grow in that When you spend energy, levels furthers types achieved it target. fact to clean keep increasing work addition are, do that by, our spend of which that we to into the we with customers that the related the

at you've So substantial growing dollars market, a got it. being with thrown

got because of that doesn't You've projects community been these past. a contracting the reality in in haven't exist type built

the the huge well by spending adopter to a we've base such early extremely that with of We're advantage customer base. We're period an known trusted in customer in come we long that for of dollars. a that these time. So been businesses

we'll as spend So benefit. they dollars

So at which their level of achieve spends, we again if we those customers target. we that are think just grow the increasing

offer to add target. we to that going exceed we're As services overtime, what we further

Sean Eastman

the for helpful. Got Thanks you, time. again really

Jose Mas

Sean. All right, thanks

Operator

the I'd Mas additional closing now or any for Mr. to like turn remarks. back to call

Jose Mas

like ask of our year providing Thank call. would end everyone call. We Again and Once I quarter those again, this to forward today. concludes the our for We today. us third who've joining participation supported safe. stay XXXX update your look for another all year you on to during us thank to

Operator

Ladies for today's that and your you gentleman Thank concludes conference participation. call.

You may now disconnect.

MasTec (MTZ) 30 Oct 202020 Q3 Earnings call transcript