MasTec's Margins Are Improving -- an Indicator About Telco/Cable Spending? (MTX, DY)

"Slash" submits: MasTec (ticker: MTZ) reported results after market close. As I had pointed out earlier, margins are starting to move up. Gross margins increased nicely from 11.4% to 14.8% sequentially, and that's impressive as its very tough to increase margins in this rising cost environment.

G&A expense was higher but operating margins improved as well. MTZ is a play on not only better spending by carriers on specific projects like FTTx, but also a restructuring story that trades at a discount to DY.

MTZ's top line and EPS were better than expected, but the guidance for next quarter looks really strong on the bottom line though weaker on top line, implying that margins will improve going into Q4 also.

The company also filed its 10Q. 28.4% of total revenues were attributed to one customer. Last quarter 36.7% of revenues came from two customers. The company also disclosed revenues by industry for only three industries instead of four in June. The missing industry is Energy.

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