On Mar 12, 2014, we issued an updated research report on
L.B. Foster Company
). The company delivered strong earnings per share in the fourth
quarter of 2013, which increased 6% year over year to 71 cents.
Quarterly revenues of $156.5 million were also up 11% year over
The Construction segment performed well, with sales surging
67% year over year to $62 million. The U.S. transportation
construction industry has been improving from the prior-year
levels. Thus, the segment is expected to continue benefiting.
Also, Foster is attempting to gain a significant market share
through product launches. The company also acquired Ball Winch in
Nov 2013, to strengthen the company's foothold in the custom
coating capability for items including connections, specialty
fittings and large-diameter line pipe.
However, the company's reduced backlog is a major setback.
Foster recorded a backlog of $183.1 million in fourth-quarter
2013, declining 13.2% year over year. Backlog reduced 13.3%,
29.9% and 9.7% year over year for Rail segment, Tubular segment
and Construction segment, respectively. Moreover, Transit
Products and concrete ties business are expected to decline in
Expected decline in some segment led to negative estimate
revisions for 2014 and 2015 over the past 30 days. As a result,
the Zacks Consensus Estimate for 2014 and 2015 declined 5.2% and
2.7% over the same time frame to stand at $3.08 and $3.60,
Key Picks from the Sector
Foster currently carries a Zacks Rank #4 (Sell). Other players
in the industry include
AK Steel Holding Corp.
CaesarStone Sdot-Yam Ltd.
United States Steel Corp.
AK STEEL HLDG (AKS): Free Stock Analysis
FOSTER LB CO (FSTR): Free Stock Analysis
UTD STATES STL (X): Free Stock Analysis
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