Pittsburgh, PA-based L.B. Foster Company recently announced the acquisition of privately-owned Ball Winch Pipeline Services, LLC. Established in 2005, Ball Winch Pipeline deals in customized coating services for steel pipe and fabricated steel products. The value of the acquisition remained undisclosed.
Ball Winch Pipeline will become a part of Foster’s Tubular segment. The acquisition will enable Foster to enhance its product offering in oil and gas, mining, water and waste water industries.
The company has been eyeing coating expansion for quite sometime now. Earlier this month, Foster announced the expansion of its Birmingham, Alabama based steel pipe coating facility. This project was undertaken to meet the increased demands from Foster’s strategic partner, AMERICAN Steel Pipe.
These strategic initiatives are likely to help the company achieve improved results in the upcoming quarters. Their aim is to enhance the Tubular segment, decline in which was a major reason for the drop in earnings per share in the third quarter of 2013.
A highlight of the third quarter 2013 results has been provided to better understand the situation. Earnings per share in the quarter came in at 95 cents, down 5.0% year over year. The decline can be attributed to 4.8% fall in revenues led primarily by decline in the Rail and Tubular Products segment’s sales. In the third quarter, the Tubular segment’s sales fell 45.0% year over year to $7.4 million, as a result of lower sales in the coated products.
Foster currently carries a Zacks Rank #3 (Hold). Other stocks worth a watch in the industry include Companhia Siderurgica Nacional , Shiloh Industries Inc. and United States Steel Corp. (X - Free Report) . While Companhia Siderurgica and Shiloh hold a Zacks Rank #1 (Strong Buy), United States Steel carries a Zacks Rank #2 (Buy).