MasTec, Inc. (MTZ)
Q1 2010 Earnings Call
May 6, 2010 9:00 am ET
Marc Lewis - VP of IR
Jose Mas - President & CEO
Bob Campbell - EVP & CFO
Alex Rygiel - FBR Capital Markets
Vance Edelson - Morgan Stanley
Liam Burke - Janney
Adam Thalhimer - BB&T Capital Markets
Tahira Afzal - KeyBank
William Bremer - Maxim Group
John Rogers - D.A. Davidson
Previous Statements by MTZ
» MasTec, Inc. Q4 2009 Earnings Call Transcript
» MasTec, Inc. Q3 2009 Earnings Call Transcript
» MasTec, Inc. Q2 2009 Earnings Call Transcript
Welcome to MasTec's first quarter 2010 earnings conference call initially broadcast on May 6, 2010. Let me remind the participants that today's call is being recorded. At this time, I'd like to turn the call over to Marc Lewis, MasTec's Vice President of Investor Relations. Marc?
Thank you, Nancy. Good morning, everyone. Welcome to MasTec's first quarter earnings conference call. The following statement is made pursuant to the Safe Harbor for forward-looking statements described in the Private Securities Litigation Reform Act of 1995.
In these communications, we may make certain statements that are forward-looking such as statements regarding MasTec's future results, plans, and anticipated trends in the industries where we operate. These forward-looking statements are the company's expectations on the day of the initial broadcast of this conference call and the company will make no effort to update these expectations based on subsequent events or knowledge.
Various risks, uncertainties and assumptions are detailed in our press release, filings with the SEC. Should one or more of these risks or uncertainties materialize or should any of our underlying assumptions prove incorrect, actual results may differ significantly from results expressed or implied in these communications.
In addition, we may make certain non-GAAP financial measures in this call. A reconciliation of any non-GAAP financial measures not reconciled in these comments to the most comparable GAAP financial measure can be found in our earnings press release or on the Investor Relations section of our website located at www.mastec.com.
With us today, we have Jose Mas, our Chief Executive Officer; and Bob Campbell, our Chief Financial Officer. The format of the call will be opening remarks and analysis by Jose followed by a financial review from Bob. These discussions will be followed by a Q&A period, and we expect the call to last approximately one hour. Jose?
Thank you, Marc. Good morning and welcome to MasTec’s first quarter call. Today, I will be reviewing our first quarter results as well as providing my outlook for the markets we serve. First some first quarter highlights. Revenue for the quarter was $450 million, a 32% increase over prior year's quarter. EBTIDA increased 20% to $34 million versus $28 million in last year's first quarter.
We generated organic growth during a very difficult economic environment, cash flows were strong and EPS was $0.10 a share for the quarter. We had a solid first quarter; actually we performed better than expected. On our last call, I mentioned the severe weather being experienced early in the quarter. While the weather negatively affected some of business during the quarter, the impact was offset by the strength in our pipeline, renewable and wireless business.
Our pipeline business accounted for nearly 25% of revenues for the quarter, with our most recent acquisition representing over 80% of that number. Our renewable business was up over 50% and our wireless business more than doubled from last year's first quarter. Over the course of the last few years, I have discussed our diversification strategy and it’s focused on what we believe are higher growth industries. We are beginning to reap the positive results from that strategy.
We have been through a very difficult economic period and while there are many signs of improvements, it’s still tough out there. Despite that by the end of 2010, we expect revenues to have doubled and EBITDA to have tripled that of 2007 and we did this during a very difficult economic environment. As the economic environment improves we believe we will see significant opportunities or substantial improvement in our business model.
In general, over the past few months we have seen a large increase in the number of opportunities that are available to us in our different markets. Today, our resources remain under utilized, but we are holding on to those resources despite a short-term cost in anticipation of things to come. We have built a solid portfolio of service offerings and are well established in growing markets. I have said it before and I’ll say it again. MasTec has never been in a better position than it is today.
Now I would like to cover some industry specifics. Our communications business accounted for 50% of total revenues for the quarter compared to 58% in last year's first quarter and 52% in the fourth quarter of 2009. Within communications our install-to-the-home business was down slightly year-over-year and flat relatively to the fourth quarter. While we are entering the weakest quarter of the year with DIRECTV, our largest communications customer, we are encouraged by recent activity and expect a slight year-over-year increase in revenues in the second quarter from DIRECTV.
Our Wireline and Wireless business were about equal in revenue in the first quarter. As I stated earlier wireless revenues doubled on a yearly basis, but we’re down sequentially as expected.
In 2009 over 65% of our wireless revenues were generated in the third and fourth quarter. While we are experiencing significant year-over-year growth, we expect a similar percentage of work to be performed during the second half of this year.
AT&T, our largest wireless customer recently gave CapEx guidance for 2010 of between $18 billion to $19 billion, yet they only spent $3 billion in the first quarter. They also indicated that wireless CapEx should increase 34% on a year-over-year basis. We currently have excellent visibility in this industry, our business is progressing as expected and we plan to see significant year-over-year growth.