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MasTec Management Discusses Q2 2012 Results - Earnings Call Transcript

In summary, we had another good quarter. Performance was very strong across all of our businesses, with the exception of the 2 challenging Marcellus projects, which we previously discussed. We are near completion on both of those projects and expect to be fully complete early in the third quarter. However, the effort to complete those projects has been more difficult and costly than we expected.

During the second quarter, we recorded a provision for losses of over $25 million related to these 2 projects. The projects have been a drain on both profits and resources, and we look forward to getting them behind us. Aside from those 2 projects, performance and execution throughout our business, including the rest of our pipeline business, has been excellent and ahead of our expectations. I'll discuss that in more detail in a minute.

Again, revenues for the quarter were up $275 million or 38% year-over-year, and up approximately $250 million or 33% sequentially from the first quarter. We are now expecting 2012 full year revenue growth of between 24% to 26%, and this comes off of 32% growth between 2010 and 2011. We continue to enjoy strong demand for our services, resulting in strong revenue growth. We also saw broad-based margin improvements, with the exception of the 2 Marcellus projects I spoke about.

Margins and margin improvement is our key area of focus, and we expect improvements in the second half of this year. I believe MasTec's diversified business model is our key differentiator and one that has helped drive our success. Today, we serve numerous markets and industries that we feel have solid long-term fundamentals with significant opportunities for expansion and growth. We strongly believe that our exposure to petroleum and natural gas pipelines and facilities, high-voltage electrical transmission, wireless infrastructure construction and the construction of power generation sources should continue to be excellent sources of growth and opportunity for MasTec for years to come.

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