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MasTec Shares Drop as Company Cuts Full-Year Outlook

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Andrew R. Michaud

• August 06, 2023

Shares of MasTec, a provider of infrastructure-related project-management services, plummeted nearly 12% following the company's announcement that it is revising its full-year outlook due to customer spending constraints. The stock fell to $106.47 during morning trading. Despite this decline, shares have still seen a 25% increase this year.

Tightened Customer Spending

MasTec's Chief Executive, Jose Mas, acknowledged that several customers have begun tightening their capital expenditure management. This shift in spending by customers has led the company to readjust its full-year sales outlook from $13.0 billion to $13.2 billion down to $12.7 billion to $13.0 billion.

Revised Earnings Expectations

In addition to the revised sales outlook, MasTec also lowered its projected adjusted earnings for the full year. Previously estimated to be between $4.35 a share and $4.85 a share, the new projection is now $3.75 a share to $4.19 a share.

Challenges in Clean Energy and Infrastructure Segment

During an analyst conference call, Chief Executive Jose Mas explained that MasTec's difficulties primarily stem from its clean energy and infrastructure segment. He admits that the company misjudged sales expectations for Infrastructure and Energy Alternatives, which was acquired by MasTec last year for over $700 million.

Impacted by Inflation Reduction Act and Permitting Delays

Chief Financial Officer Paul DiMarco highlighted two major challenges contributing to the delay of energy-related projects: the uncertainty caused by the Inflation Reduction Act and ongoing issues with supply chains and permitting delays. These factors have resulted in several projects being postponed until 2024.

Despite these setbacks, MasTec remains committed to finding solutions and adapting to the evolving landscape of the industry.