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Astec Industries (ASTE) Down 7% Since Last Earnings Report: Can It Rebound?
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It has been about a month since the last earnings report for Astec Industries (ASTE - Free Report) . Shares have lost about 7% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Astec Industries due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Astec Q4 Earnings Lags Estimates, Revenues Up Y/Y
Astec reported fourth-quarter 2021 adjusted loss per share of 3 cents, missing the Zacks Consensus Estimate of earnings of 1 cent. The company reported adjusted EPS of 56 cents in the prior-year quarter.
Including one-time items, the company reported a loss per share of 40 cents in the quarter under review against earnings of 67 cents per share in the year-ago quarter.
Revenues & Backlog
Astec’s revenues increased 12.1% year over year to $268 million in the quarter under review. The top line came in line with the Zacks Consensus Estimate. Domestic sales were up 18.2% year over year on pricing initiatives, stronger asphalt plant and concrete plant sales as well as increased aftermarket parts sales. International sales declined 6.8% in the fourth quarter owing to lower equipment sales, partly offset by increased aftermarket parts sales.
Given strong demand, Astec achieved a record backlog of $763 million in 2021, suggesting a year-over-year surge of 111.5%. Domestic backlog climbed 123% year over year to $627 million, while international backlog increased 69.7% to $136 million.
Operating Performance
Adjusted cost of sales climbed 17.5% year over year to $214 million in the fourth quarter. Adjusted gross profit was $54 million compared with the year-ago quarter’s $57 million. Adjusted gross margin contracted to 20.1% from the year-ago quarter’s 23.8%.
Adjusted selling, general, administrative and engineering (SG&A) increased 27% year over year to around $47 million. The company reported an adjusted operating income of $0.8 million, reflecting a year-over-year slump of 95%.
The adjusted operating margin was 0.3% compared with 6.6% in the prior-year quarter. The 630-basis point contraction was caused by manufacturing challenges resulting from supply chain and logistics disruptions as well as pandemic-induced labor restrictions and inflationary cost pressure, higher costs related to centralization and infrastructure efforts associated with the company’s ongoing transformation initiatives and a legal contingency.
Adjusted EBITDA was $8.1 million in the reported quarter, down 65% from the year-ago quarter. Adjusted EBITDA margin was 3%, reflecting a 680 basis points contraction from the prior-year quarter.
Segment Performance
Revenues in the Infrastructure Solutions segment were up 14% to $190 million from the year-ago quarter’s levels. The segment’s adjusted gross profit was $36.1 million compared with the prior-year quarter’s $39.5 million.
Materials Solutions segment’s total revenues were $78 million in the quarter under review, reflecting an increase of 8.5% year over year. The segment’s adjusted gross profit was $16.4 million, down 1.3% year over year.
Financial Position
Astec ended 2021 with cash and cash equivalents of $134.4 million compared with $158.6 million at 2020-end. At the end of 2021, the company’s long-term debt was $0.2 million compared with $0.4 million at the end of 2020.
2021 Performance
Astec reported an adjusted EPS of $1.47 in 2021 compared with $2.38 reported in the prior year. Earnings missed the Zacks Consensus Estimate of $1.51. Including one-time items, the bottom line came in at 78 cents per share compared with $2.05 reported in 2020.
Sales were down 7% year over year to $1.09 billion. The top line missed the Zacks Consensus Estimate of $1.10 billion.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
The consensus estimate has shifted -47.3% due to these changes.
VGM Scores
At this time, Astec Industries has a subpar Growth Score of D, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. It's no surprise Astec Industries has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.
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Astec Industries (ASTE) Down 7% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for Astec Industries (ASTE - Free Report) . Shares have lost about 7% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Astec Industries due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Astec Q4 Earnings Lags Estimates, Revenues Up Y/Y
Astec reported fourth-quarter 2021 adjusted loss per share of 3 cents, missing the Zacks Consensus Estimate of earnings of 1 cent. The company reported adjusted EPS of 56 cents in the prior-year quarter.
Including one-time items, the company reported a loss per share of 40 cents in the quarter under review against earnings of 67 cents per share in the year-ago quarter.
Revenues & Backlog
Astec’s revenues increased 12.1% year over year to $268 million in the quarter under review. The top line came in line with the Zacks Consensus Estimate. Domestic sales were up 18.2% year over year on pricing initiatives, stronger asphalt plant and concrete plant sales as well as increased aftermarket parts sales. International sales declined 6.8% in the fourth quarter owing to lower equipment sales, partly offset by increased aftermarket parts sales.
Given strong demand, Astec achieved a record backlog of $763 million in 2021, suggesting a year-over-year surge of 111.5%. Domestic backlog climbed 123% year over year to $627 million, while international backlog increased 69.7% to $136 million.
Operating Performance
Adjusted cost of sales climbed 17.5% year over year to $214 million in the fourth quarter. Adjusted gross profit was $54 million compared with the year-ago quarter’s $57 million. Adjusted gross margin contracted to 20.1% from the year-ago quarter’s 23.8%.
Adjusted selling, general, administrative and engineering (SG&A) increased 27% year over year to around $47 million. The company reported an adjusted operating income of $0.8 million, reflecting a year-over-year slump of 95%.
The adjusted operating margin was 0.3% compared with 6.6% in the prior-year quarter. The 630-basis point contraction was caused by manufacturing challenges resulting from supply chain and logistics disruptions as well as pandemic-induced labor restrictions and inflationary cost pressure, higher costs related to centralization and infrastructure efforts associated with the company’s ongoing transformation initiatives and a legal contingency.
Adjusted EBITDA was $8.1 million in the reported quarter, down 65% from the year-ago quarter. Adjusted EBITDA margin was 3%, reflecting a 680 basis points contraction from the prior-year quarter.
Segment Performance
Revenues in the Infrastructure Solutions segment were up 14% to $190 million from the year-ago quarter’s levels. The segment’s adjusted gross profit was $36.1 million compared with the prior-year quarter’s $39.5 million.
Materials Solutions segment’s total revenues were $78 million in the quarter under review, reflecting an increase of 8.5% year over year. The segment’s adjusted gross profit was $16.4 million, down 1.3% year over year.
Financial Position
Astec ended 2021 with cash and cash equivalents of $134.4 million compared with $158.6 million at 2020-end. At the end of 2021, the company’s long-term debt was $0.2 million compared with $0.4 million at the end of 2020.
2021 Performance
Astec reported an adjusted EPS of $1.47 in 2021 compared with $2.38 reported in the prior year. Earnings missed the Zacks Consensus Estimate of $1.51. Including one-time items, the bottom line came in at 78 cents per share compared with $2.05 reported in 2020.
Sales were down 7% year over year to $1.09 billion. The top line missed the Zacks Consensus Estimate of $1.10 billion.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
The consensus estimate has shifted -47.3% due to these changes.
VGM Scores
At this time, Astec Industries has a subpar Growth Score of D, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. It's no surprise Astec Industries has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.