MasTec (NYSE:MTZ) Reports Upbeat Q1, Full-Year Sales Guidance is Optimistic

Infrastructure construction company MasTec (NYSE: MTZ) reported Q1 CY2025 results topping the market’s revenue expectations, with sales up 6% year on year to $2.85 billion. On top of that, next quarter’s revenue guidance ($3.4 billion at the midpoint) was surprisingly good and 4.4% above what analysts were expecting. Its non-GAAP profit of $0.51 per share was 51.2% above analysts’ consensus estimates.

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"We are pleased to report another strong quarter of financial performance, with key metrics showing strong year-over-year growth and also exceeding guidance," said Jose Mas, MasTec's Chief Executive Officer.

Company Overview

Involved in the 1996 Olympic Games MasTec (NYSE: MTZ) is an infrastructure construction company that specializes in the telecommunications, energy, and utility industries.

Sales Growth

Reviewing a company’s long-term sales performance reveals insights into its quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Over the last five years, MasTec grew its sales at an impressive 12% compounded annual growth rate. Its growth beat the average industrials company and shows its offerings resonate with customers.

Long-term growth is the most important, but within industrials, a half-decade historical view may miss new industry trends or demand cycles. MasTec’s annualized revenue growth of 9.4% over the last two years is below its five-year trend, but we still think the results suggest healthy demand.

We can better understand the company’s revenue dynamics by analyzing its backlog, or the value of its outstanding orders that have not yet been executed or delivered. MasTec’s backlog reached $15.9 billion in the latest quarter and averaged 8.8% year-on-year growth over the last two years. Because this number is in line with its revenue growth, we can see the company effectively balanced its new order intake and fulfillment processes.

This quarter, MasTec reported year-on-year revenue growth of 6%, and its $2.85 billion of revenue exceeded Wall Street’s estimates by 4.9%. Company management is currently guiding for a 14.8% year-on-year increase in sales next quarter.

Looking further ahead, sell-side analysts expect revenue to grow 10.5% over the next 12 months, similar to its two-year rate. This projection is particularly healthy for a company of its scale and indicates its newer products and services will fuel better top-line performance.

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Operating Margin

Operating margin is a key measure of profitability. Think of it as net income - the bottom line - excluding the impact of taxes and interest on debt, which are less connected to business fundamentals.

MasTec was profitable over the last five years but held back by its large cost base. Its average operating margin of 3.1% was weak for an industrials business. This result isn’t too surprising given its low gross margin as a starting point.

Analyzing the trend in its profitability, MasTec’s operating margin decreased by 3.5 percentage points over the last five years. This raises questions about the company’s expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability. MasTec’s performance was poor no matter how you look at it - it shows that costs were rising and it couldn’t pass them onto its customers.

Earnings Per Share

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

Sadly for MasTec, its EPS declined by 3.2% annually over the last five years while its revenue grew by 12%. This tells us the company became less profitable on a per-share basis as it expanded.

We can take a deeper look into MasTec’s earnings to better understand the drivers of its performance. As we mentioned earlier, MasTec’s operating margin declined by 3.5 percentage points over the last five years. Its share count also grew by 4.8%, meaning the company not only became less efficient with its operating expenses but also diluted its shareholders.

Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business.

For MasTec, its two-year annual EPS growth of 34.9% was higher than its five-year trend. This acceleration made it one of the faster-growing industrials companies in recent history.

In Q1, MasTec reported EPS at $0.51, up from negative $0.19 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects MasTec’s full-year EPS of $4.65 to grow 26.4%.

Key Takeaways from MasTec’s Q1 Results

We were impressed by how significantly MasTec blew past analysts’ backlog expectations this quarter. We were also excited its EPS outperformed Wall Street’s estimates by a wide margin. On the other hand, its full-year EBITDA guidance missed significantly and its EBITDA guidance for next quarter fell short of Wall Street’s estimates. Overall, we think this was still a solid quarter with some key areas of upside. The stock traded up 1.9% to $136.50 immediately following the results.

Indeed, MasTec had a rock-solid quarterly earnings result, but is this stock a good investment here? If you’re making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here, it’s free.