Zacks Investment Research downgraded
LB Foster Co.
) to a Zacks Rank #5 (Strong Sell) on Aug 10, based on weak
second-quarter 2013 results combined with a weak outlook for the
Why the Downgrade?
Foster reported adjusted earnings per share of 71 cents in the
second quarter of 2013, missing the Zacks Consensus Estimate of
97 cents by 26.8%. Revenues came in at $149.9 million, missing
the Zacks Consensus Estimate of $175.0 million as well as the
year-ago quarter's revenues by 8.1%.
The company's Rail and Construction segments faced a
year-over-year decline in revenues. The Rail segment was impacted
by a reduction in both concrete tie sales and rail technologies
businesses. The Construction segment's sales were affected due to
a reduction in the sales of fabricated bridge business and the
piling product lines.
Total backlog for Foster declined 12.6% year over year to
$220.3 million as a result of a 79.0% decline in the Tubular
In the coming quarters, bookings in the Tubular segment are
expected to drop further, leading to a decline in total revenue.
The Rail segment is also expected to remain in doldrums. However,
some improvement in the Construction segment is anticipated.
Subsequent to the results, Foster has witnessed a downward
revision for all of its estimates for the years 2013 and 2014.
The downward revisions for 2013 have lowered the Zacks Consensus
Estimate by 12.5% to $2.73 per share over the last 7 days. The
Zacks Consensus Estimate for 2014 was also reduced by 7.7% to
$3.35 per share during the same period.
Other Stocks to Consider
Other steel companies stocks that are worth a look include
Angang Steel Company Limited
Kobe Steel Ltd.
). While Ternium carries a Zacks Rank #1 (Strong Buy), Angang
Steel and Kobe Steel carry a Zacks Rank #2 (Buy).
ANGANG STEEL LT (ANGGY): Get Free Report
FOSTER LB CO (FSTR): Free Stock Analysis
KOBE STEEL-ADR (KBSTY): Get Free Report
TERNIUM SA-ADR (TX): Free Stock Analysis
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