MasTec to begin 2008 slow
MasTec Inc. (NYSE: MTZ), which builds and maintains infrastructure — telephone, Internet, electric, water, sewer and natural gas — as well as providing installation and maintenance services for satellite and cable television services, will get off to a slow start in 2008, according to a research report by investment bank ThinkEquity Partners.
Coral Gables, Fla.-based MasTec is experiencing “still-deliberate” demand from wireless company Verizon Communications Inc. (NYSE: VZ) and has been slow to reduce its legal expenses, according to a research report by Eric Kainer, an analyst with investment bank ThinkEquity Partners.
“We are cautious on 2008 revenues,” Kainer wrote, adding that he is reducing his profit estimates for the fourth-quarter ended Dec. 31, 2007, to $0.15 per share, compared with a previous forecast of $0.16 per share. The revenue forecast has been lowered to $258 million from a previously forecasted $262 million.
The consensus estimate on Wall Street is for net income of $0.15 per share and revenues of $260.7 million, according to a poll of seven analysts by Thomson Financial.
In the fourth quarter of 2006, MasTec had earnings of $0.14 per share on revenue of $241.1 million.
On the plus side, Kainer wrote that he is optimistic about the company’s energy business. MasTec builds products for electric companies and services water, sewer and natural gas pipelines.
The analyst expects this segment of the company’s business to benefit from new leadership, but warns that some of the bids won during the first quarter of 2008 will not make an impact until late in the year.
Kainer also forecasted that telecommunications giant AT&T Inc. (NYSE: T) will start to invest more money in some of its local networks, thus driving new business for MasTec.
The analyst is maintaining his “buy” rating on the stock but has reduced his target price to $15 from $19.
At 2:05 p.m. ET, shares of MasTec Inc. (MTZ) had lost $0.14, or 2%, to $8.64. The 52-week low of $7.82 was reached on Jan. 8, while the 52-week high of $16.25 was hit on June 28, 2007.
