Earnings call transcript Q2 2023

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Operator

Welcome to MasTec's Second Quarter 2023 Earnings Conference Call initially broadcast on Friday August 4, 2023.

Let me remind participants that today's call is being recorded.

At this time, I'd like to turn the call over to our host Marc Lewis, MasTec's Vice President of Investor Relations. Marc?

Marc Lewis

Thanks Yash. everyone. morning, Good second MasTec's call. Welcome quarter to XXXX following for forward-looking is Reform of pursuant Private made Harbor Safe Act the to XXXX. statements Litigation The Securities statement described the in

we the the MasTec's future on the and plans, are conference communications, does In where statements the trends company's initial the results, undertake to this make forward-looking we call as regarding such expectations operate. and that These these broadcast not statements of forward may these subsequent company in looking of industries based expectations anticipated day events certain are statements knowledge. or update on

materialize risks, yesterday should underlying our prove are and communications. Various one or any detailed incorrect, from the assumptions may differ these in actual with expressed press uncertainties SEC. results Should releases these assumptions significantly or and filings implied of from or of in uncertainties, more results our or risks

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

we In call. may on this financial measures addition, certain non-GAAP use

of comparable A most in comments reconciled these financial press found not our measures the release. non-GAAP can earnings financial to in measure GAAP any be reconciliation

going and with that assist mastec.com. companion and also download. have note documents webcast Both to your information and website files forward. two with models Events PDF quarter document Please the ended on and There the Investor’s Presentation associated just our we of are a page available today’s at is on financial for analytics developing

slide expect to lot followed of things discussions with And talk call period. opening about and followed financial today Dimarco, of hour. the and review and Jose to The important Paul quarter our in be by will we an Executive our remarks These the President us Q&A by had an We about from Paul. have CFO. have CEO, today. call line by last a With Vice format analysis be we Mas, Jose will

to over get turn I’d Jose? the So Jose, call going. can so to like we

Jose Mas

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

highlights. $X.XX per some at million, $XXX backlog $X,XXX First, was quarter was was earnings share million, billion. end Revenue quarter quarter was and adjusted adjusted for the second EBITDA $XX.X

strong In challenges. our margins million XXXX summary, up that the is about was XXXX revenue non-oil up XX% above up And second like our while $XX performance was was gas year-over-year, improved we EBITDA revenue highlight up segment lower performance. and guidance the every second in EPS $XXX margins progression EBITDA And and half with with I'd in in than expect expectations. quarter, generally second are million half having revenue EBITDA but previous some of previous year-over-year less our guidance XX% XX%. on line -- margin half to despite story some greatly margin is second impact the progression intact. and

Energy Clean think cover predominantly to our the this MasTec Infrastructure I'm are more segment. in in detail. by misses challenges revenue XXXX our Oil in half revenue due XXXX in challenges like expected and the to some second segments, I'd offset increases to of second revenue Gas half margin our think set out. as out and that are future. is Thus, confident highly segment proving significant specifically and improvement, about our goals our show I you critical we in

First, growth revenue total still expect let level XX%. to company numbers. XXXX start We with exceed high me some

that expected mastic there about from think exclude XX% pipeline you number. a to MVP IEA, from the to as is organically, so grow it we're IEA X% pre of If X% this in calculation, MasTec bump

total double albeit previous our organic full expectations. expect So company even growth, year excluding than revenue slightly digit we MVP, lower

half increase in second XXXX we where still believe large as about projects segment, expectations moderating some wireless wireline is balance environment. generate the year deployment to segment their impact short economic year-over-year revenues. sheet term cover last customers to the revenues continues plans. our our We expect The customers flat see be year. interest XX% in as now XXXX area, with begin and off to further detail. communications last In to to Communication me our opportunity spend the over expect We are market revenue some predominantly adjust with rate Let softness X% in strong, and activity

with expectations revenue, could with expectation revenue lower line delivery generally Our quickly slightly which predicted Power previous strong are change. in

$XXX increase project. Our of billion or Oil due million expected expectations to previous $X and Gas the revenue to be from roughly restart MVP about is a the

and about original or million of now XX% XXXX, $X like I'd Thus, of growth. XX% XXXX, they and organic decline our IEA a Again, of has $X challenges. year $X.X legacy billion to for billion having expect year is and numbers. $X.X organic Clean some generate with revenue billion the in $X.X most for segment to XXXX. in versus We estimate where cover Energy let revenues renewable infrastructure of significant currently generated are full Infrastructure growth year business original compares about negative the billion, or level a our legacy full This expected to with Finally, start $.X XXXX approximately approximately last $XXX expectation. our contributing revenues high our billion of versus IEA approximately MasTec’s me we business the

customers. wind our offset some Again, roughly to The I'd for growing and projects our be which we've solar energy was growth, revenue in was after detail. revenue IEA a IEA and was would detailed cover for XXXX, by billion, plan, that mid-single XXXX market. added So digit like by for acquisition XXXX and $X.X softer segment expectation clean the market knowing

XXXX, were quarter First, revenues quarter, the in later many latter even quarter to second and getting into of pushed third into the and start But XXXX. as or the of second in supposed generally part tracked that develop, line. the projects began into the quarter in second

customers’ there difference project their As a on execute the ability played out, has year has to in pipeline. big been

that knew project would important in analysis XXXX. be very the We

that As good really job businesses this we growth of did legacy our expected legacy a evidenced XX% in understanding year, business. by our think organic we

While about has IEA future are to potential. excited the half project that important misjudge aren't second risks canceled periods. the we're It's IEA year also these and seeing, rather and into note demand collectively we pipeline they deferred projects, relationships

expectations. a very revenue to we're obviously still and revenue half and half do half the of energy grow at disappointed segment. the Segment to significant our clean IEA albeit growth, is While the versus second with first guidance, second we adjustment expected this for in infrastructure year XX% expect both below

prepare in XXXX., the we believe the bringing we pipeline, for we projects be fill as we As predictability. XXXX right to are believe revenue scrutiny much we and and our consistent finish out more will IEA XXXX our

us expectations. both Again, to IEA know the thought it's time taken around get revenue the customer base, to and process company’s

believe review set properly MasTec’s ability add detailed challenges. unique of IEA risk lot and a we represented a process forecast its of assessment While and will revenue. to XXXX value to

the disappointed goals is believe of improvement that want better to our to while issues that going chain, is with our one unchanged. our industry had XXXX in believe main our with to and segment. the clean prepared XXXX, Demand services At supply deal to of shareholder again, be into believe margin for half we start year the to emphasize interconnect margin renewable that miss, value for significant unprecedented. show strongly our also of we're We I we ability second XXXX our in the energy drive revenue are goals infrastructure and XXXX. of objectives and permitting

our We increases achieve actually believe our Thus, revenue and our expect to these we in by guidance. without XXXX, margins the improves. cost the ability expand this benefit leverage, from as absorption goals afforded to operating previous revenue further we

Gas our the re-mobilizing started Mountain we segment, Oil Pipeline. and onto to Moving Valley

juggled lots guidance, the over project. equipment our some by have customers, will Since expect reach stops month, ultimately pieces starts our in people the had completion wasn't MVP we in contemplated we September. of in deployed last year, X,XXX with In the we While assumed under originally we've of capacity on just end and full to and projects now of X,XXX XXXX. and

expect XXXX revenue levels. year approximate to up $X and million guidance. from or approximately previous gas full to oil $XXX And similar expect about now We revenues billion we

strong to In wireless demand funds for short beginning be to federal our through segment, dollars spends, level. we expansion with wireline term with available some see distributed softness state in continued Communication the fiber and continue and broadband

to continue very be long-term We bullish opportunities. about those

is our performing segment expected. Finally, Delivery Power as

While tighter, to budgets we see a capital strong some utilities we demand. see little managing continue

of projects, developers acceleration and demand seeing for renewable we're expected and the upgrades. grid new utilities construction significant both increased With the

pleased we're end. date, recap, year progress expect performance through and to margin continued our To with

better. expectations very XXXX, process excited our much be of expect strong opportunities XXXX We and we the organic predictability and didn't future. implemented manage growth year we've we revenue half we And renewable full to growth for in our to revenue future for continue While both beyond. we're disappointed the believe ensure better about right revenue second

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

I turn over Paul will for now the to our Paul? financial call review.

Paul Dimarco

lower EBITDA Beginning Jose, earnings second our million. by results, Despite $XXX billion adjusted was exceeding quarter below both consolidated of revenue, of estimates. approximately you, million with $X.XX, revenue morning, Thank good still and share we generated guidance adjusted and $X.XX per our everyone. $XXX approximately

and records second adjusted EBITDA both the quarter. quarterly revenue for were Our

expectations was and as at was adjusted the million EBITDA We of basis line for certain million roughly Our quarter slowdown quarter Adjusted first XXXX. balance revenue customers expenditure in did EBITDA revenue in experience segment the $XX up or Communication in year-over-year. of XX.X%. XXX and basis with capital some points the margin of points revised plans performance XX $XXX

and in million was XX or of this in with points line margin expectations points Our up segment as well, QX of million X.X%. year-over-year. from basis with also Power XXX adjusted basis revenue EBITDA improved Delivery EBITDA and Adjusted segment $XXX $XX

trends year. last to efforts see integration continue over our the performance from positive We

XX.X% our and project $XX adjusted digit numerous Our developments EBITDA of or Oil had quarter Performance favorable Gas EBITDA of of related adjusted revenue, and million driven higher strong to of million on double significantly expectations was low segment close and outs margins. than execution by $XXX strong with a revenue projects.

to compared Second energy This driven quarter. below XXX over approximately $XX delays year projects. improvement both basis adjusted and Revenue represents and last revenue million, of EBITDA expectations $XXX adjusted certain million was XXX point quarter in by QX improvement points X.X%. was when slightly and basis EBITDA clean second were execution or versus

While prior the half pleased factors dates half there with causing project and pressure slip, the a -- are progression, on second expectations. start anticipated versus in to our the number segment’s of second margin putting results

Backlog $XX.X notices decline X% in execution to for the second backlog quarter timing our by projects billion, first are we energy or proceed. decline versus over quarter’s contract a the currently $X.X was totaling record that clean segment working driven level. on excludes limited of The was billion reflecting under

For our once be policy, backlog will contracts included executed. fully these in

our Additionally, lower backlog segment sequentially. communication is

days million are growth, XXXX. improvement Q. support higher expecting was working by slow to back investment of XX revenue levels XX flow $XX certain operations DSO by work used partially our customers cash half by in offset we days QX in at As from capital the from of driven

to the debt in leverage for was As and course forma mid-XXs we expect pro stated subsequent of expect we unchanged last X.Xx, return year's DSO the quarter, from XXXX improvement quarters. to acquisition the IEA. of further last at Net QX over

quarter for approximately $XXX remains the Liquidity second strong million. at

our As of guidance outlook developments half updated for our been have number the a reflected in impacting second of there XXXX.

we clean discussed, Inflation planned $XXX originally times chain our dates activity start slips now to in segment factors. to To issues, interconnection this start lead all over illustrate for Uncertainty project energy delays are Act, several project As Reduction expect the permitting around beyond. to experienced as our and conservative We customers. of impact, date million contributing to our forward. supply agreement believe due evaluate revenue Jose in due shift outlook monitor for these XXXX these is light and we'll these for going appropriately into We some of combination to market confident closely outlook XXXX items for our developments. of the we project extremely in factors. half continue remain timing And XXXX second delays,

supply continued customers half, In construction their is related chain. and our spend by segment, This reduced higher to Communications second from first strong moderating half performance impacted after is volume a wireless who in certain overall costs capital services. are predominantly

With we revenue sets adjusted our with in now expected second of billion be Mountain $X.XX ‘XX are prior We $XX.XX this mix, on $XX an Valley this the of weather to Pipeline gas segment. next X.X% expected QX see expect approved, for going project revenue before a and shift billion, revenue. where increase billion EBITDA margins to in fully meaningful $X.X Adjusted EBITDA $XXX Turning to predominantly of a X.X% we're guidance. a these to mobilized in $X winter in mid-teens. the to generate now in still approximately to or million versus to billion, expect week, anticipate segment revenue now oil the be meaningful billion segment the to Gas in. developments, to Factoring Oil contribution from and we ranges half,

by MVP, segment is average. a largely Second half and cost revenue margins which below lower is contract risk driven plus

We the project in in this previous of to of $X.X mid-single billion compares digits. billion margins the $X XXXX mentioned $X.X guidance EBITDA our previously revenue energy to expect should clean remain billion. delays, Adjusted reflecting

We adjusted margins with double billion EBITDA leverage to communications to prior versus some expectations. guidance to revenue digits. operating margin pressure due $X.X low anticipate the We lowering lower $X.X with expect million generate in

billion, performed is to EBITDA than less XXXX margins. takes single with for for segment to lower XXXX. restoration $X.X digit $X Introducing revenue expected billion the Finally, account emergency potential range into Power Delivery we be services in revenue the high

guidance $X.XX $X.XX. from to to our revised adjusted range share XXXX earnings per also We

In of addition in adjusted to expense expected also We completed higher required adjusted higher impacted million expected we is to depreciation flow. EPS is by expense and a non-value expense the equipment update, interest now million. higher to EBITDA $XXX sustained and revised of full asset be due the year guidance purchase expect QX. due of $XXX Interest $XXX depreciation to our for pipeline rates cash timing to and small

or to For of the Adjusted $X.XX. and revenue million earnings share range and revenue to million, of billion EBITDA to per EBITDA of expect XX.X% equates is X.X% approximately $X.XX year-over-year $XXX to from billion third $X.XX quarter, we expected adjusted This to $XXX adjusted revenue. XX% growth. to $X.XX

Looking million, at that revenue third digit slightly flat third expected energy $X.X approximating We billion revenue with will range. adjusted be to with our $X.X adjusted quarter in EBIT margin the our performance, billion is segment than communications quarter expected higher segment clean $XXX with QX. approximate EBITDA anticipate segment to margins second mid-single quarter the

as also Our improved costs expected leverage revenue in delayed ramps inefficiencies margin for the reflects mentioned. starts previously but some operating project QX carrying our for

margins, delivery quarter adjusted million $XXX a Third slightly digit year, strong revenue below third low power quarter. with should approximate EBITDA double last

of forecasts EBITDA approximate Oil QX structure work our mid-teens. segment the to $XXX plus quarter. and MVP Gas for million adjusted the is with than on revenue margins Lower previous expected the in in cost reflected

of revenue. points approximate basis expenses XXX QX are again to Finally, corporate expected

from we continue cash debt approximately cash in CapEx million year of still XXXX. of in be XXXX net end low $XXX to $XXX two With approximately net We to generate million, leverage expect operations expect the times. to

mentioned, Marc modeling a we section as investor have to back Lastly, of provides sheet assumptions website detail and additional that for posted the summarizes and guidance these purposes. our comments relations

Q&A. call the for I'll the to now operator turn over

Operator

[Operator Instructions]

Riley. Rygiel comes B. first with Alex Our question from

Alex Rygiel

quarter. questions A Nice gentlemen. here. morning, Good you. Thank couple quick

relates segments awards it what's that that billion guidance. as timing is are any to new that the First, in XXXX $X.X near what the of the pending,

Jose Mas

our clean renewable business. Yes, be infrastructure is clear, so specifically that energy projects to right, and in

to give important around the revenue comfort obviously, missed, so we we're and is So how number seeing why bullish what reason the it, to with give, we're seeing of to business. projects. that thought renewable it's it's future only we're is on the And was the growth

in be of projections is $X.X of in the XXXX. half our actually currently And billion, will those beyond right, of $X.X So billion it believe all XXXX. extend second that not will some I don't ’XX, projects for any

Alex Rygiel

and which sounded pretty MVP, like includes revenue, was your to guidance would directional then, a flat $X yes, is oil be for secondly, burn XXXX project. billion, quick gas, it XXXX, And which it

on is, in XXXX, gas I XXXX? the confidence my visibility that and guess much to you flattish question in backfill so the So here what's gives we see MVP that oil

Jose Mas

said with statement We bullish is it's very agree a it, purposely on because we segment, you, think Alex, our visibility we the excellent.

We work is it have secured, all -- a but lot a in of that although be backlog, of most not maybe not secure.

always relative impact good would year. a what And year ‘XX. think be is a next worry maintaining a about it feel entering out given playing it's hit and big we way do going had at to in such knew about We year. certain MVP given impact the that would comp in to the the great that we're segment despite will revenues, really point would a project we project. having And I a of a time, always So job

Operator

Our comes Neil next Sachs. from with Goldman Mehta question

Neil Mehta

the Yes. start team. clean to energy the on getting and XXXX. $XXX infrastructure, that's to want morning out pushed million, I Good

are So can outs granularity the that the of some And ground? more what's your in what's get XXXX? you around the confidence us And show does up then up that that push addressed? you showing ’XX issues driving give some on interval

Jose Mas

in there as most the there's incredible couple those of may Good is Because the Yes, may important projects is the massive identify I'd of need in Neil. business those the some of this those we In cases, have not highest we to forward. be a think do, have right, legacy one high of $XXX say excellent a which year we certainty think that But in have think as an moving we things morning, I that projects level cases, And available, we things. demand those be projects we will question, of likelihood on, right? some about we services. to subset there. pass it's One, our for some projects, definitely did XXXX, million, right, some of comfortable.

that With those late said, very in are of stages. projects many

start we them really, good some feel some them, really will before we of So of end. about year

and reasons. a So, there's different I think lot of

very laid think I Paul out well.

to because others have happening for the time, more I Some around people some from than think we're seeing that -- and project, financial Act, predictable understand everything the the are every have Reduction have that rules long their of things right this was nots, trying the the different XXXX. it financials been impacts in a the Inflation megawatts business certain that of developers year very that seeing work in haves have we're definitely people consistent right, been do more number but

of prior that look toward projects, business, more more at geared towards latter think was more newer some the are it we when I And geared business type the to that building of where and much much part, are the developers or cyclical, IEA’s was MasTec customer.

managing you of important. a think that of be think that shame I do properly that to us, work critically I in allows And there's to And didn't manage is good again, we there lot job out risk. that mix on going And a XXXX

Neil Mehta

Thanks, to you low path around from Xs and glide indicated leverage Jose, to just a the get that that And there's follow had up is that perspective. leverage. a

sheet balance just get there. about to where to you So get, want get your debt and path to want to talked the and how you management,

Jose Mas

we got year obviously, in XXX we're pay back of the through EBITDA see. lot appreciation be going of we couple year, the well revenue a dollars a to encapsulating growth, do debt so a from as of Neil, we've million the down, that growth think end but to earnings able Sure, it's big half

they working about at the feel DSO required confident that. it's some with our achieve level ability year, but and we pretty being be, the investment that, cadence should probably of to the the a, DPO there's So capital for and

Operator

We Citigroup. go to with next question Kaplowitz our from Andy

Andy Kaplowitz

us them, Is happening talked people good quarter, Jose, wind any maybe projects you color for it workforce, seeing in a attrition in large really terms about the just us there's you wind color a industry. of X,XXX which lot more are issues been give then Hey, ground, maybe Obviously, morning, this of give everyone. versus just Like, peer hiring regarding game the and what's solar? unexpected IEA. little a talk more from the could a your sort is of wind jump about delayed? to

So are of sort what there? seeing you

Jose Mas

growth reality, lot was We, in the in plan, year billion done knew the didn't knew good for planning XXXX. wind their had base, think, would year, expectations a challenged have said did we backtrack they stuff And although to little able dives that purposes, to really okay in intents they a in some be of it remarks. lot which I in an lot late by solar we managing were over they the about did a frankly, business Last we the plan, good reemphasize them. all deep time that for, of and maybe growing. the bit. $X.X about again, a that prepared historically right? of relative the And, process in acquisition We bought of just we on We I some was I they market customer revenue. have done of issues past. public the the we job Obviously, was post-acquisition, do estimated company, felt very history quite the closed have revenue a an have

around ability they've that another available. the wind and also the kind union these complexity heavier move resources there's generally other projects line And no side, we develop, been too of as side, question adds to of the to generally So, first the types again, were historically quarter the the aggressive in felt what get so with we plan. and second year heavier on they're are were that on okay, to which didn't expectations projects

to definitely level projects And But is because XXXX, than lot grow down it’s revenue begin either. slated their bigger the it's the their their in the hit So revenue there's -- to got of pushed. business, solar revenue. they split, solar had more wind at a a it we've that wind didn't should

really where think your to number re-mobilize projects it's to the customers commit got resources once understanding you committed. understanding resources. really hard another think to about, we were. because those a you've the in the, without then, works short the what off And available it's And was their to a job begin customers order, secure of where saw go not fall I were, I job, So

So, question to to you demand we there the look, versus peer, now, our reason wanted industry have the our about to legacy the incredibly was that no business. legacy your absolutely is having organic the of show doubt in growth right, And our split XX% kind IEA high. is right we success that in legacy we're business,

markets the that's them need fix. on not right, very on what working We're are and plan And forward, about the the these we're think the go potential market, worried there, execute part understand our to errors ability So about projects, better. we unforced it's our do. to all that I to diligently

Andy Kaplowitz

your pushed telecom maybe sort color near well would billion could that during would maybe as be about been Okay, you for CapEx, quarter talk can be And And you. over you term talked moving you that’s customers what near but just telecom, obviously so forward, changed $X helpful. say to change for more challenging didn't that adjusting Telecom, And number, forecast term XXXX or you've out? going bullish. of you the about, then, helpful? is And,

Jose Mas

Sure.

wireless to wireless our the the think think one business which near the have change than of wireline adjust So more wireline business into outlook. And majority the slowdown I is, rate it to enough active. interest time, of only at We I think think we slight places We to on extremely with side, execute tweaks. I back, there's is solid will larger dive why the it's and what deep the seeing that, we're come spend. this didn't few we is that think midterm moment right, where growth that XXXX, but for is you're in seeing when environment customers

year, X% again, it's. instead a, have we're to to it's of So expectation than slightly growing think the we in still going half, for single business, XX%, strong so grow not what a still it's growing the we're I second was. digits original less high but

Operator

question UBS. Fischer comes Steven with from Our next

Steven Fischer

integration. closed? it be here, Thanks. Good just about since need flow. bit been of would little on morning, of accomplished? And I'm free to IEA costs What deal another there were because you've progression integration ramping just how the kind want you million the Can step these of if that's has of the really up up up, are your acquisition net $XXX to the follow each talk increment the to what But of whether costs the address line. all in wondering and of they're included below and they've also integration impact that kind ramping kind what cash cash a

Paul Dimarco

is Paul. Steven, Yes, this

integration half your expense. So the year around question, of year. And guidance second they the back the half or any are acquisition ramped down in of second severance termination costs factored the to in

So well. was captured as cash flow any on impact

Steven Fischer

keep kind it, all finding be it's just layers kind more And because of but more of finding why Okay, overhead you're raising cut. it's that need just you're just to you’re curious – not it, of

Paul Dimarco

about that. Sorry

be the it's when enacted, it timing right. Sometimes can

to on program, insurance right. things termination or example, our So at done a things of license something It's agreements, be that has like that. bringing on them to like, for renewal, savings

there's So into some QX to tail think that's where it. all it on QX. into expect it But and we've do and I captured moderate

Jose Mas

is differences the all we've we of first customers, the labor combining, the the multiyear we projects IEA, was, the terms projects and two long integration. what I of capturing today that we far over which commit with it to and negotiations the when guess we customers labor and long resources, units, those amount We've then to of in were need deep of we prior go-to-market superior the detail time. the in look to strategy performance integrating on an a were term at to time of projects a of IEA think ability transaction, lots understand that availability the period again, think, over to I lot op, obviously, of done enormous your was our And spent think

putting at of I positioning making for the think all we're to think a on a and right that. So team I good next we'll ’XX really beyond structured understanding execute more that think and on together lot over ourselves much more this market, the progress the I talk coming about quarters, level,

Steven Fischer

cable? Jose, just and the I said albeit and a I But side, od-off strategically up is Okay, to your from I strategy? what on strategic just I shifting so, else making? could extent slower you of that back. shift are expect fiber are that support that you business of to growth, the wireless to the the to you've pursued And focus shift know, wireless know telecom in guess, programs. what you if has some meantime if to that in come happen kind kind you follow of

Jose Mas

it's shift, than this if don't grow, our you I more think year, our look wireline at business year, will a XX%.

create we for networks through devices data devices attached the these to the and right. use continue we're So In capacity increase. having long what the there. to it's and second how there, today's we're will term, still incredibly live devices, of the amount is the that's need how about, year, mixed, to wireless albeit that strong over moderated always on wireless and our you to do, bullish are of And great be for this growth need bit think year growth half business all a the we little goes business, think wireless going we about a really when we how the is more a we

impact the is wireline companies uncertain greater this in might in I bullish business advantage in the time, wireline seeing not know we're on business. could adjustments. ‘XX we're better moment opportunity So to have large, of seeing economic unfortunately, as slight are which have our that wireless versus And not growth take customers it We're growth And impact time, I'm at and the we're, very some of if an in it. as and ‘XX. all think the much growth, side these wireline some going larger of very we similar market. we

still the somewhat year opportunity us, look versus I think in we at ‘XX, when So unchanged. full for ‘XX it's

Operator

W. Robert Baird. comes question from next with Our Hauke Justin

Justin Hauke

for I don't give Thanks changed. my high digit, those taking you whatnot. margin I point mid-single ranges give on question. And to digit you morning. wanted guys single aren't Good assumptions, the estimates guess ask

MVP here business. you're obviously, margins taking got highest in margin in your You've And down. coming your

is assuming on to clarify, profitability type just maybe each kind you're of you expectations? than were? Or more another in help where is segment is one, I that the little bit I segment lower just guess So of wanted segment it there some versus a one concentration

Jose Mas

Yes, Justin.

right, MVP a and a stab cost it to it's plus as then job. mean, unit turn over to it take I'll Paul. I'll a I is MVP, it not So job, at just relates

project about So lower that be MVP, a and expect balance oil having than we've in talked Again, we didn't always our to margin profile gas business. the of XXXX.

to So project segment. margin the ‘XX, it'll as have dilution a in of that that slight executes out

Paul Dimarco

with of Yes, and then were pressure versus going communications, in I pressure just with would future. right but just foreseeable to improvement, as the of our a in the operating carrying good to on a still there's comes energy, add, it probably this with be some clean bit the on are just volume, guidance we deal and bit we workload I where leverage, little lower lower think little costs previously, prior

So, they still we thought guidance, relative our in same range, where but that slightly those QX were, margins to two lower segments. in at

Justin Hauke

a lot I there acquisition, Henkels and cleaning legacy working about think guess thank up, of wanted pressuring IEA. sheet. unbuild up. you actually you infrastructure jobs, still and those the that charges my are through I some to you're of That guys of of Okay, you. was are have working bit about looks like the little I which kind through? kind -- had they ask you're kind talked what's follow is, I Henkels of, projects that curious, on talked just ticked in up there they're about at the in It balance terms a or status has specifically? margins

Paul Dimarco

projects been products working so think the complete. over so. MasTec’s those clean last Henkels, are you're through to or from on working half weren't the those Yes, year energy a that we've from were I projects and industrial referring segment We're mostly those

stages having good we're and QX on of look we those, from to the those our the complete. with various by be and forward us, we about end I feel close positions think we claims have. in should And negotiation performance all on out they a of behind that customers hopefully any very perspective,

Operator

Data. Thalhimer with- Adam Thompson from comes question next Our

Adam Thalhimer

Hey, oil gas of capture? nature does the year good traditional we the Jose, your for in that morning, what's oil and jobs, starting jobs? of some Are outlook guys. kind next those and gas get carbon to into

Jose Mas

a alternative the as the think course work prepared done. next as be and of starting early built, work I that There we'll better is traditional, to about to couple are we've the be we've next currently opportunities pipelines available, for traditional think think talk over I of booked there's, our quarters, still it lot the around statements, types got year. I

about we'll about quarters. talking excited And a more be we're lot think that I the in coming So that.

Adam Thalhimer

Okay, And seeing you activity much enough. that delivery, project not talk of fair power What then kind for today. segment? are

Jose Mas

we we and question both talk Justin's a didn't it, integration. has actually kind Henkels the we on business. it. about, look, market, exactly opportunity how we're about We've integration of a mean, to mean, the how we're lot for year, of because think expected that kind tremendous gone the to then how it's as that revamped relative earlier I to about we business completely performing we're in executing smoothly, and really feel that past quarter I got going

that still think out kind I again. yet future I working we have trying really nice growth think business of a next and opportunity were we've year think we'll it's positioned put year, this in well ourselves I planned. show as together, where growth. to really everything to And was And for an

Operator

from comes Credit Jamie question Suisse. with Cook next Our

Jamie Cook

margin by morning, about, your way projects of being Jose, forward. ahead good I down guess was one going Hi, are two these talking that one, of required investment questions. peers large some of

So to term longer potential what investment, margin still degrees are way risks the in positive. fairly is by down margins XXXX, that understanding are

understand normalized be in just loaded you. growth prospects, there, think to And second the you the like question expect still past versus more end to more the I end a then about throughout we few want out back second really earnings given the do backlog of I be, XXXX. about year? for, year year, opportunity do see My back a that's But you XXXX, you question. don't guess, talk Or my years? to is, you loaded see, sort Thank of earnings as

Jose Mas

Hi, Jamie.

there. lot a So

me try it. to deconstruct Let

‘XX, So and available I units, think the on from strategy, of type a in and renewable that's margin thinking as is about the every different obviously, our work business when we're work story work in coming IEA ‘XX, think ‘XX into down further more is a of investment. obviously of they lot have a going without off lot done, we've do we year to that capacity a a

substantially the pure in you're going renewable it's lower transmission about projects. think you're And looking large not less necessarily growth require projects, we on think of as more projects, I it's side, if our to required renewable is large the if to looking investment at which be we transmission traditional going think the on really be ‘XX, than at capital.

relative on still through think we think book improve of after don't can manage isn't, in the we a deterioration have have mix we business margins ‘XX that the we're going to we're we and expectation to as have. in actually So that, us -- just margin our based we that growing, XXXX, for

good we about that. actually So feel

Jamie Cook

earnings end --? second the question, about XXXX, back And in can the expect which is second we question loaded,

Jose Mas

beginning slow a was the us. it's for ‘XX question. good Yes, relatively of

to in actually early ‘XX. a we ‘XX So be what we're think seeing comparable good is going to

of into already are renewable that projects that well that ‘XX. We have or going lot to started have are a starting go

going think part ‘XX more the ‘XX activity year So a the in we're with of ‘XX. to lot than I we early into did

our always comps think But do well we're half I for of think just have second a up in the it's quarter of good year So going versus of will first the versus you to the I first ‘XX because see, of the year half of we're business. not bigger ‘XX. set quarter first the nature

Operator

Our final KeyBanc. Eastman with comes question from Sean

Sean Eastman

thanks for Hi, Team, taking my questions.

next to come bit into terms to XXXX of, environment stuff, back operation, more the that to what's billion maybe to this, term you're improve going where comment for of next up help relative MasTec of been is improved to implemented way year. kind predictability the $X And, action I renewable what operating for like a just about the there, wanted the reasonable into beyond predictability into Just near type Jose, maybe expectation a revenue has the year? revenue number, color comfortable, been kind extent there, potential stacking in in the the mean, little revenue

Jose Mas

good it's relative note is, to risk legacy right, to couple of important this highlighted on just One year the we because job again, did I really the difference, assessing projects side. things, we a think right. energy, So, a MasTec clean renewable

assessment we've at one we've we've IEA, And now got, that's that. of all going I taken forward. kind think all the team taking lead of that implemented on projects

viability Our think revenue, internal guide position don't going we be the based us Because think I stacking into own see be you're more projects, we ‘XX. want it's this going in projects, again. on to what as conservative to and we in and be, of to

that guide think see but higher a XXXX. number question that think than going to see we relative in us no is I have there original we, XXXX. we're, I to to to So don't for us $X you'll guide our will segment, in billion, XXXX, significant growth that you're was guide

Sean Eastman

for Fisher's one then Paul, coming And Steve question. back helpful. that's Okay, to just

flow, that capital reduction been keep in a the cash On significant help it flow the guidance? the with up, that the what's how offset quite And cash Is GAAP to down is working there earnings earnings is guidance bit? the number it tightened intact been pretty that to play? has guidance you

Paul Dimarco

down I on range Yes, we're $XX so mean, million, right. the we're,

lower revenue little helps. think, bit I a

I company, investments, built year DSO those improve had based and capital we've think work we're across on good And, capital seeing think less conservatives number term there, to there's cadence I the of the the near some into performance, metrics. So momentum the the helps. really working

there's not us set a assumption level. to aggressive an -- get not So it's to that

Sean Eastman

where And -- mean, what achieving -- got on I that quick capturing last the on Okay, one, just where the any in kind at that you're then you're success where slack of you're DSOs, working color capital? it.

Paul Dimarco

our we've build a of things and getting around and some that slowdown diligent pockets the be Clean what with long little quickly, lower little then requirements opportunity, bit customers bit of working capital a other has paid mix. the was got in tooth, its volume we're that Energy couple with businesses, than as I segment getting of taken a and there well. of the some more historically properly to more Yes, communications traditionally mean, and has our

Jose Mas

communication bill in getting to maybe, that. And including get right into And of in various you last that the course I point, cadence our understanding maybe to paid even customers We added little you specificity the a how of how add just of quicker. segment. more the and lot segments, a just year them think

I of gives a lot of competence in part us that's today, think year. show end what we're starting seeing a they're back which And dividends. of to lot of the the

Operator

session. now it closing conclude Mas or turn the Mr. I'll will for additional back Q&A to comments. any That Jose

Jose Mas

few months. Just want Thanks you our on And participating. to call to for everybody updating the for third us. thank take in a we opportunity forward look to quarter joining

Operator

that your gentlemen thank for conference. and today's will We Thank participation. you. you Ladies conclude

disconnect may You at your line this phone time.

MasTec (MTZ) 4 Aug 232023 Q2 Earnings call transcript