Analysis MTZ
Why MasTec kept its pipeline crews through costly delays
A record backlog has not prevented pressure on pipeline profits. Work has now begun on delayed projects, but late starts are still shaping the construction group’s outlook.
Permit-related access delays kept some MasTec pipeline crews and equipment from working at full capacity in the third quarter of 2026. The company chose to retain experienced teams, accepting a near-term cost to stay ready for the work ahead.
Chief Executive Officer Jose Mas said keeping those crews was important given the pipeline investment the company expects over the next few years. Its own pipeline backlog grew about 26% from the previous quarter.
Construction on the affected projects has now begun and production is ramping up, MasTec said. The financial effects of starting late are still working through the year: there is less time to reach normal production levels before December.
Demand and profitability are moving at different speeds
Pipeline revenue rose 21% from a year earlier, but its profit margin fell. Power Delivery moved in the opposite direction, helped by stronger operations and the July acquisition of electrical contractor The Superior Group.
The following margins use MasTec's segment EBITDA measure, which leaves out interest, taxes and accounting charges for assets used over time.
| Business | Q3 2025 margin | Q3 2026 margin |
|---|---|---|
| Power Delivery | 9.4% | 13.2% |
| Pipeline Infrastructure | 15.4% | 10.4% |
| Communications | 11.3% | 6.7% |
Communications also faced customer spending delays that management had flagged in July. The company is cutting indirect costs and leaving underperforming markets, with benefits expected to start in 2027.
Across the group, quarterly revenue reached a record $5.15 billion, up 30%. That growth includes acquired businesses. The MasTec company profile records the purchases and financing behind the larger group.
The backlog still has to become earnings
MasTec's estimated 18-month backlog reached $24.5 billion. Some of that estimate comes from service agreements without guaranteed minimum purchases, so it is broader than a book of firm orders.
Reported profit attributable to MasTec shareholders fell to $150.6 million from $160.7 million. Higher borrowing costs, expenses tied to acquired assets and a larger profit share for minority owners of subsidiaries took a bigger bite from earnings.
Cash from operations improved to about $267 million from $89 million in the quarter. Acquisition financing also increased the debt load.
For 2026, MasTec now forecasts adjusted earnings of $8.92 to $9.30 a share, placing July's $9.30 target at the top of the new range. That measure removes selected costs, including the accounting expense of spreading acquired assets' value over time. Management expects revenue and earnings deferred by project timing to move into 2027.