MasTec, Inc. (MTZ) Lowers Q2 Outlook

MasTec, Inc. (NYSE: MTZ) announced that it expects second quarter results to be negatively impacted by new and unexpected delays in wireless project spending activity as well as weaker than expected oil and gas segment results.

MasTec now anticipates reduced levels of second quarter wireless project revenues, as various planned projects have recently been deferred and or reduced in scope. While the Company still expects wireless revenue levels to grow in the second quarter when compared to last year, growth levels are expected to be lower than previously expected, impacting anticipated second quarter communication segment revenues by approximately $45-$50 million. These unexpected revenue declines are anticipated to significantly impact segment results reflecting the effect of reduced absorption of non-variable indirect and overhead costs. The Company anticipates that additional changes to levels of second half 2014 wireless project spending may also occur, although the level of potential changes cannot yet be estimated. The Company will provide further guidance on any potential impacts of these items once they are determinable.

The Company is also expecting weaker oil and gas segment results due to project start up delays during the quarter as well as pricing pressure on current quarter short-term, mid-stream pipeline activity. While the Company anticipates oil and gas revenue levels will grow in the second quarter when compared to last year, growth levels are expected to be lower than previously estimated, impacting anticipated second quarter oil and gas segment revenues by approximately $25-$30 million.

For the second quarter of 2014, the Company now expects revenue of approximately $1.1 billion. Second quarter 2014 continuing operations adjusted EBITDA, a non-GAAP measure, is estimated at $105 million and continuing operations adjusted diluted earnings per share, a non-GAAP measure, is estimated at $0.40. Given the limited information available at this time, the Company is not currently in a position to provide further information regarding full year 2014 guidance. The Company will provide further information on full year guidance in its upcoming second quarter earnings release.

**** The Street sees Q2 revs of $1.16 billion and EPS of $0.52.

Jose Mas, MasTec's CEO, noted, "While we are being negatively impacted by real-time, short-term changes in our wireless business, our long-term outlook remains extremely positive. Across all of our business, we are enjoying very active levels of opportunities which we believe will provide substantial growth in the markets we serve. The fundamentals that will drive this growth remain in place."

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