What happened

Construction company MasTec (MTZ -2.00%) is seeing some belt-tightening among its energy and utility customers, and it is impacting near-term results. Shares of MasTec were down more than 15% on Friday after the company lowered its outlook for the full year.

So what

MasTec is an engineering and construction company focused on communications, energy, utility, and other infrastructure, with a focus on renewable energy power generation. The company had a solid quarter, earning $0.89 per share, $0.04 ahead of estimates, despite revenue that at $2.9 billion came in about $100 million below expectations.

Revenue was up 25% year over year and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) climbed 43%. MasTec's backlog at quarter-end stood at $13.4 billion, up 22% compared to the second quarter of 2022.

CEO Jose Mas noted that all operating segments showed improved margin performance year over year, with clean energy and infrastructure leading the way.

"While margins improved as expected, we did begin to see tighter management of CAPEX by a number of customers," Mas said in a statement.

Now what

That tightening is expected to intensify, and some revenue MasTec had expected to book in 2023 relating to its 2022 acquisition of Infrastructure and Energy Alternatives is likely to move into 2024 due to project delays. As a result, MasTec lowered its full-year earnings outlook to $3.75 to $4.19 per share, down from $4.64 to $4.91 per share. Revenue guidance was lowered to a range of $12.7 billion to $13 billion, down from $13 billion.

Both ranges are below Wall Street's consensus expectation for $4.51 per share in earnings on sales of $13.17 billion.

Mas said that "while we are disappointed with the second half revenue expectations, our focus on improving margins has materialized and we expect this to continue in the second half of 2023 and we expect to enter 2024 with significant revenue growth and margin expansion."

MasTec remains confident the company is positioned to grow in the long term, but the near term looks volatile. Investors on Friday are voting to watch how it all plays out over the next few months from the sidelines.