Back to top

Analyst Blog

L.B. Foster Company (FSTR - Analyst Report) posted adjusted earnings per share of 71 cents for fourth-quarter 2013, up from 67 cents in the year-ago quarter. Adjusted earnings also beat the Zacks Consensus Estimate of 63 cents by 12.7%. The year-over-year increase in earnings was mainly a result of increased sales.

For 2013, L.B. Foster reported adjusted earnings per share of $2.85, compared with $2.72 in 2012. Reported earnings also beat the Zacks Consensus Estimate of $2.78 per share.

Revenues: In the fourth quarter of 2013, total sales were $156.5 million, up 11.2% year over year, primarily due to a rise in sales of the Construction segment, partially offset by a decline in the Rail and Tubular Products segment’s sales. Revenues were almost in line with the Zacks Consensus Estimate of $157.0 million.

Revenues from the Rail Products segment decreased 6.0% year over year to $85.8 million. This was a result of softness in the rail distribution businesses, partially offset by strong sales in the Rail Technology and Transit Products divisions.

The Construction Products segment’s revenues rose 67.0% year over year to $61.9 million, driven by higher piling products and concrete building products sales.

The Tubular Products segment generated revenues of $8.7 million, 29.3% year-over-year decline due to lower coated products sales.

For 2013, the company reported revenues of $598.0 million, up 1.6% year over year. Revenues were marginally below the Zacks Consensus Estimate of $599.0 million.

Costs/Margins: Adjusted gross profit margin in the quarter was almost flat year over year at 19.6%. Selling and administrative expenses in the quarter were recorded at $18.6 million, up from $16.5 million in the year-ago quarter.

The Rail Products segment recorded gross profit margin of 22.0%, expanding 310 basis points (bps) year over year, attributable to a decline in the plant expense in concrete tie business. The Construction Products segment’s gross profit margin improved 30 bps from the year-ago quarter to 16.1%, as a result of increased sales. The Tubular Products segment’s gross profit margin in the reported quarter was 25.5%, falling 740 bps year over year, due to de-leverage of volume along with a reduction in price.

Balance Sheet/Cash Flow: Exiting the fourth quarter of 2013, L.B. Foster’s cash and cash equivalents were approximately $64.6 million, compared with $96.0 million in the previous quarter. Total long-term debt balance stood at $25,000 versus $19,000 in the preceding quarter.

For 2013, L.B. Foster’s cash generation from operations was $13.9 million, down from $27.0 million in 2012, primarily as a result of working capital changes.

Outlook: Management expects a favorable business environment for all the segments in 2014. However, Transit Products and concrete ties business are expected to decline. First-quarter 2014 sales are expected in the $123.0–$128.0 million range. L.B. Foster predicts net income in 2014 in the range of $5.5–$5.9 million. In 2014, capital expenditure is expected in the range of $18.0–$22.0 million. The increase in capital expenditure is expected to support the company’s growth plans.

Other Stocks to Consider

L.B. Foster currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks worth considering in the industry include AK Steel Holding Corporation (AKS - Analyst Report), Olympic Steel Inc. (ZEUS - Snapshot Report) and United States Steel Corp. (X - Analyst Report). All these stocks sport a Zacks Rank #2 (Buy).

Please login to or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research


Are you a new Zacks Member or a visitor to

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
UTD THERAPE… UTHR 117.83 +28.51%
TRIQUINT SE… TQNT 20.67 +6.52%
RF MICRO DE… RFMD 12.47 +6.04%
VASCO DATA… VDSI 14.77 +4.68%
BANCO DO BR… BDORY 15.53 +3.95%