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Dive Brief:
- Contractor MasTec reported higher profits on flat third quarter revenue after starts on projects in its Clean Energy business were delayed due to adverse weather, material delivery timing and permit issues.
- The Coral Gables, Florida-based builder, which specializes in the engineering, installation and maintenance of communications, energy and utility infrastructure, showed profits of $95.2 million, up from $14.3 million a year ago, while backlog increased 11% to $13.9 billion. Revenue of $3.3 billion matched the same level of a year ago.
- CEO José Mas told investment analysts on a Nov. 1 conference call that the delayed starts came in the firm’s Clean Energy business unit, which includes utility-scale solar and wind projects. “These are big projects,” Mas said. “These are projects that if you slip a week or two, it has a significant impact to revenue.”
Dive Insight:
CFO Paul Dimarco said the material deliveries and inclement weather drove delays, and Mas added, “It could be delivery of materials, it could have been a particular permit.”
MasTec is not alone in facing delays on projects — election uncertainty across the U.S. is causing the construction market to languish, particularly in the private sector, experts told Construction Dive. A bright spot has been infrastructure projects, which kept nonresidential construction spending positive in November, and helped offset the dip on the private side.
José Mas
Permission granted by MasTec
Despite those headwinds, MasTec was able to raise its outlook on profits for the year. The firm said it anticipates $187 million in net income, a 78% jump from its initial projection of $105 million at the beginning of the year. Due to the delayed starts, the firm now projects $12.23 billion in revenue, down slightly from its originally stated $12.5 billion, a 2% decrease.
Mas also said the company would likely be a buyer of other firms moving forward.
Prompted by an analyst who asked about cash flow and whether potential M&A was in the cards, Mas said the company had great financial flexibility, and that it was seeing an active market in the space.
“I think it could be reasonable for you to expect that we’re engaged, we’re looking and there are some things that we would potentially do in the future,” Mas told analysts.
MasTec is one of the top general contractors in the country by revenue, according to Engineering News Record. It began to classify itself as a GC in the rankings after it bought Indianapolis-based builder IEA in 2022, and was the industry’s fourth largest contractor in this year’s iteration of the list.