Astec Industries Inc.
) gained over 10% after the company reported solid fourth-quarter
2013 earnings on Feb 25. Earnings improved 50% to 36 cents per
share from 24 cents in the year-earlier quarter. Moreover, the
reported figure beat the Zacks Consensus Estimate of 31 cents.
The stock price rose to a new 52-week high of $41.47 and closed
at $40.81 on Feb 26, exceeding the previous high of $40.37 on Jan
The year-over-year growth was driven by successful operation of
the new wood pellet plant in Georgia and strong performance of
the aggregate processing equipment businesses.
Total revenue decreased 2% to $223.9 million from $227.6 million
in the year-ago quarter, thereby missing the Zacks Consensus
Estimate of $227 million. The year-over-year decline was
primarily due to lower demand in the Underground Group.
Domestic sales rose 10% year over year to $142 million.
International sales were $81.5 million, down 17% year over year
due to decreased sales, primarily in Mexico, Australia, Africa,
Asia, India and the Middle East. This was somewhat offset by
higher sales in the former-Soviet Union states.
Cost of sales fell 1.6% year over year to $176.5 million. Gross
profit was $47 million, down 2% from $48 million in the year-ago
quarter. Gross margin contracted 10 basis points (bps) year over
year to 21.1%.
Selling, general, administrative and engineering expenses were
$36.6 million in the reported quarter against $39.8 million in
the year-ago quarter. Income from operations increased 26% year
over year to $10.7 million. Consequently, operating margin
expanded 100 bps year over year to 4.7%.
Revenues in the
segment declined 5.8% to $56.2 million from $59.7 million in the
year-ago quarter. Segment profit also fell over 10% to $6.9
million from $7.7 million in the prior-year quarter.
Total revenue for the
Aggregate and Mining Group
segment went up 3.5% year over year to $80 million. Segment
profit grew 25% to $6 million from $4.8 million in the prior-year
Mobile Asphalt Paving Group
segment's total revenue increased 16% to $39.9 million from $34
million in the year-ago quarter. However, segment profit fell 19%
year over year to $0.8 million.
reported total revenue of $14 million, down 33% from $20.9
million in the year-earlier quarter. The segment reported a loss
of $0.9 million, compared with the loss of $1 million a year ago.
reported revenues of $33.6 million versus $35.2 million in the
year-ago quarter. Segment loss was $5.8 million, narrower than
the year-ago quarter loss of $7.5 million.
Astec ended 2013 with cash and cash equivalents of $35.6 million,
down from $80.9 million as of 2012-end. Astec has no debt on its
balance sheet. The company's domestic backlog increased 28% to
$200.5 million as of Dec 31, 2013 from $156.6 million as of Dec
31, 2012. Conversely, the company's international backlog
declined 16% to $89.7 million as of Dec 31, 2013 from $107.2
million as of Dec 31, 2012.
Fiscal 2013 Performance
For full-year 2013, Astec reported earnings per share of $1.69,
up 15% from $1.48 in 2012. However, the results fell short of the
Zacks Consensus Estimate of $1.76.
Revenues for the year 2013 decreased to $933 million from $936
million in 2012. Moreover, the reported figure lagged the Zacks
Consensus Estimate of $981 million.
Astec will benefit from new product offerings and growth in the
oil and gas business. The company continues to expand with a new
pellet plant, high tech drill rigs, pump trailers, water heaters
and gas processing heaters. In addition, Astec's consistent
endeavors to pursue acquisitions will help to expand its product
range and gain market share.
However, lack of clarity on the future of highway funding has
made customers cautious about spending on major equipment
purchases. This will likely affect the company's performance.
Moreover, adverse weather conditions, rising competition and the
prevalent economic uncertainties remain headwinds, going forward.
Chattanooga, Tennessee-based Astec is a manufacturer of
specialized equipment for infrastructural building and
Astec currently has a Zacks Rank #3 (Hold). Some better-ranked
stocks in the sector include
The Manitowoc Company, Inc.
Joy Global, Inc.
). While Manitowoc sports a Zacks Rank #1 (Strong Buy), Joy
Global and Komatsu carry a Zacks Rank #2 (Buy).
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