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Steel producer, L.B. Foster Company (FSTR - Analyst Report) posted earnings per share of 48 cents for first-quarter 2013, up 65.5% compared with 29 cents in the year-ago quarter. Earnings also beat the Zacks Consensus Estimate of 40 cents by 20.0%.

Revenue: In the first quarter of 2013, total sales were $129.3 million, up 13.2% year over year, primarily driven by growth in two of its business segments. However, it faced a decline in one of its major segments. Revenue surpassed the Zacks Consensus Estimate of $128.0 million.

Revenue from Rail Products segment increased 22.2% year over year to $81.4 million. This was a result of solid sales in the rail distribution and transit products businesses.

Revenue from Construction Products segment dropped 4.0% year over year to $36.8 million, due to lower fabricated bridge business.

Tubular Products segment generated revenue of $11.1 million, increasing 19.5% year over year.

Costs/Margins: Gross profit margin in the quarter increased 30 basis points year over year to 19.2%. SG&A expenses in the quarter were recorded at $17.1 million, compared with $16.9 million in the year-ago quarter.

Rail Products recorded gross margin of 20.9%, decreasing 70 basis points year over year. Construction Products’ gross margin increased 50 basis points compared with the year ago quarter, to 13.5%. Tubular Products’ gross margin in the quarter was 28.9%, decreasing 10 basis points year over year.

Balance Sheet/Cash Flow: Exiting the first quarter 2013, Foster’s cash and cash equivalents were approximately $81.4 million, compared with $101.5 million in the previous quarter. Total long-term debt balance stood at $21,000 against $27,000 in the preceding quarter.

Cash used in operations amounted to $17.6 million for the first quarter, compared with $2.9 million used in the year-ago comparable quarter.

Outlook: Foster expects to invest in various growth programs during 2013, to achieve better results. It is also expected that the Rail and Tubular Products’ demand will continue to expand.

Foster currently carries a Zacks Rank #3 (Hold). Other steel companies worth a look are Gibraltar Industries, Inc. (ROCK - Analyst Report) and Shiloh Industries Inc. ; both carrying a Zacks Rank #1 (Strong Buy); whereas Mechel OAO (MTL - Analyst Report) carries a Zacks Rank #2 (Buy).

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