Astec Industries, Inc. (ASTE - Free Report) posted earnings of 30 cents per share in third-quarter 2016, a 200% increase year over year but fell short of the Zacks Consensus Estimate of 37 cents.
Despite its strong overall performance, low oil and natural gas prices continue to hurt its Energy Group while the Aggregate and Mining Group continues to bear the brunt of a weak mining industry. Further, a stronger greenback continues to affect its ability to export from its U.S. based operations. Astec’s share price slumped 11% reflecting the headwinds and the earnings miss.
The maker of building, paving and mining equipment posted total revenue of $248 million, surging 17% from $211 million reported in the year-ago quarter. Revenues beat the Zacks Consensus Estimate of $244 million. The year-over-year improvement was augmented by increase in sales in all the segments, mostly led by Infrastructure Group.
Astec’s domestic sales jumped 28% year over year to $200 million. However, international sales slumped 13% year over year to $48 million. Decrease in Canada, Africa and South America were offset by increased sales in Australia, Central America and the West Indies.
Cost of sales was up 15.7% year over year to $192 million. Gross profit of $55 million increased from $45 million reported in the year-ago quarter. Gross margin expanded 100 basis points (bps) year over year to 22.4%.
Selling, general, administrative and engineering expenses surged 7% year over year to $44 million. Income from operations soared 178% year over year to $11.4 million. Operating margin expanded 270 bps year over year to 4.6%.
Segment Performance
Revenues for the Infrastructure Group segment advanced 27.6% to $109 million from $85 million in the year-ago quarter. Segment profit improved an impressive 366% year over year to $9.9 million.
Total revenue for the Aggregate and Mining Group segment rose 6.5% year over year to $85.8 million. Profit improved a massive 101.9% year over year to $7.7 million.
The Energy Group segment’s total revenue increased 16.7% to $53 million from $45 million in third-quarter 2015. The segment reported operating profit of $0.8 million, plummeting 58.5% from $1.94 million in the year-ago quarter.
Financial Position
Astec reported cash and cash equivalents of $52.5 million at the end of third-quarter 2016, up from $14 million at the end of third-quarter 2015. Receivables increased to $111.8 million as of Sept 30, 2016, from $105 million as of Sept 30, 2015. Inventories went up to $399.7 million as of Sept 30, 2016, from $384.5 million as of Sept 30, 2015. The company had no debt.
Astec’s total backlog soared 54.6% to $389.3 million at third-quarter 2016 end from $251.7 million at the end of the year-ago quarter. Domestic backlog went up 69% year over year to $325.6 million as of Sept 30, 2016, and international backlog improved 9% year over year to $63.7 million at the end of the quarter.
Outlook
Backed by its robust backlog, positive momentum in domestic sales and strong infrastructure group sales activity, Astec anticipates improved year-over-year results in the fourth quarter. For 2016, the company expects revenue growth of between 6–9% with an improved bottom-line performance. While the infrastructure group continues to perform well, Astec remains cautious regarding the outlook for aggregate mining group the energy group.
ASTEC INDS INC Price, Consensus and EPS Surprise
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Astec Industries, Inc. (ASTE - Free Report) posted earnings of 30 cents per share in third-quarter 2016, a 200% increase year over year but fell short of the Zacks Consensus Estimate of 37 cents.
Despite its strong overall performance, low oil and natural gas prices continue to hurt its Energy Group while the Aggregate and Mining Group continues to bear the brunt of a weak mining industry. Further, a stronger greenback continues to affect its ability to export from its U.S. based operations. Astec’s share price slumped 11% reflecting the headwinds and the earnings miss.
The maker of building, paving and mining equipment posted total revenue of $248 million, surging 17% from $211 million reported in the year-ago quarter. Revenues beat the Zacks Consensus Estimate of $244 million. The year-over-year improvement was augmented by increase in sales in all the segments, mostly led by Infrastructure Group.
Astec’s domestic sales jumped 28% year over year to $200 million. However, international sales slumped 13% year over year to $48 million. Decrease in Canada, Africa and South America were offset by increased sales in Australia, Central America and the West Indies.
Cost of sales was up 15.7% year over year to $192 million. Gross profit of $55 million increased from $45 million reported in the year-ago quarter. Gross margin expanded 100 basis points (bps) year over year to 22.4%.
Selling, general, administrative and engineering expenses surged 7% year over year to $44 million. Income from operations soared 178% year over year to $11.4 million. Operating margin expanded 270 bps year over year to 4.6%.
Segment Performance
Revenues for the Infrastructure Group segment advanced 27.6% to $109 million from $85 million in the year-ago quarter. Segment profit improved an impressive 366% year over year to $9.9 million.
Total revenue for the Aggregate and Mining Group segment rose 6.5% year over year to $85.8 million. Profit improved a massive 101.9% year over year to $7.7 million.
The Energy Group segment’s total revenue increased 16.7% to $53 million from $45 million in third-quarter 2015. The segment reported operating profit of $0.8 million, plummeting 58.5% from $1.94 million in the year-ago quarter.
Financial Position
Astec reported cash and cash equivalents of $52.5 million at the end of third-quarter 2016, up from $14 million at the end of third-quarter 2015. Receivables increased to $111.8 million as of Sept 30, 2016, from $105 million as of Sept 30, 2015. Inventories went up to $399.7 million as of Sept 30, 2016, from $384.5 million as of Sept 30, 2015. The company had no debt.
Astec’s total backlog soared 54.6% to $389.3 million at third-quarter 2016 end from $251.7 million at the end of the year-ago quarter. Domestic backlog went up 69% year over year to $325.6 million as of Sept 30, 2016, and international backlog improved 9% year over year to $63.7 million at the end of the quarter.
Outlook
Backed by its robust backlog, positive momentum in domestic sales and strong infrastructure group sales activity, Astec anticipates improved year-over-year results in the fourth quarter. For 2016, the company expects revenue growth of between 6–9% with an improved bottom-line performance. While the infrastructure group continues to perform well, Astec remains cautious regarding the outlook for aggregate mining group the energy group.
ASTEC INDS INC Price, Consensus and EPS Surprise
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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