Why Mas Tec (MTZ) Stock Is Tanking On Monday

NEW YORK (TheStreet) -- Shares of Mas Tec Inc. (MTZ) are lower -11.39% to $31.90 on Monday after the company announced it is expecting its 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."

The infrastructure construction company said it is expecting revenue for the 2014 second quarter to be about $1.1 billion, versus its previous estimate of $1.15 billion to $1.20 billion.

Adjusted EBITDA from continuing operations is now estimated to be $105 million, or 40 cents per diluted share. The company originally estimated $124 million, or 53 cents per diluted share for the 2014 second quarter.

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Mas Tec said it would provide full year guidance in its 2014 second quarter report which is estimated to be released in late July.  

TheStreet Ratings team rates MASTEC INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate MASTEC INC (MTZ) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, largely solid financial position with reasonable debt levels by most measures and reasonable valuation levels. We feel these strengths outweigh the fact that the company has had sub par growth in net income."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth came in higher than the industry average of 12.1%. Since the same quarter one year prior, revenues slightly increased by 4.9%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Compared to its closing price of one year ago, MTZ's share price has jumped by 25.14%, exceeding the performance of the broader market during that same time frame. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
  • MASTEC INC's earnings per share declined by 17.4% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, MASTEC INC increased its bottom line by earning $1.74 versus $1.43 in the prior year. This year, the market expects an improvement in earnings ($2.29 versus $1.74).
  • MTZ's debt-to-equity ratio of 0.87 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 1.47 is sturdy.
  • You can view the full analysis from the report here: MTZ Ratings Report
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