A month has gone by since the last earnings report for Astec Industries (ASTE Quick QuoteASTE - Free Report) . Shares have lost about 17.1% 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 its most recent earnings report in order to get a better handle on the important catalysts.

Astec Earnings Lag Estimates in Q4, Revenues Rise Y/Y

Astec Industries reported fourth-quarter 2022 adjusted earnings per share of 34 cents, missing the Zacks Consensus Estimate of earnings of 38 cents. The company reported an adjusted loss of 6 cents per share in the prior-year quarter.

Including one-time items, the company reported a loss per share of 4 cents in the quarter under review compared with a loss of 44 cents per share in the year-ago quarter.

Revenues & Backlog

Astec’s revenues increased 31.2% year over year to $350 million in the quarter under review. The top line beat the Zacks Consensus Estimate of $312 million. Domestic sales were up 32.2% year over year and International sales were up 27.4%. The upside was driven by higher volumes, and pricing initiatives.

Given the strong demand, Astec reported a backlog of $913 million in 2022, marking year-over-year growth of 19.7%. Domestic backlog rose 23.3% year over year to $773 million, while international backlog increased 2.8% to $139 million.

Operating Performance

The adjusted cost of sales rose 30.8% year over year to $279 million in the fourth quarter. The adjusted gross profit was $71 million compared with the year-ago quarter’s $53 million. The adjusted gross margin was 20.3% compared with the year-ago quarter’s 20%.

Adjusted selling, general, administrative and engineering (SG&A) increased 2.5% year over year to around $48 million. The company reported an adjusted operating income of $14.7 million, a notable increase from $0.2 million in the prior year. The adjusted operating margin was 4.2% compared with 0.1% in the prior-year quarter.

Adjusted EBITDA was $22.2 million in the reported quarter, up from the year-ago quarter’s $7 million. The adjusted EBITDA margin was 6.3% compared with 2.6% in the previous year.

Segment Performance

Revenues in the Infrastructure Solutions segment were up 27.1% to $238.4 million from the year-ago quarter. The segment’s adjusted gross profit was $48.2 million compared with the prior-year quarter’s $35.9 million.

The Materials Solutions segment’s total revenues were $110 million in the quarter under review, marking a year-over-year increase of 39%. The segment’s adjusted gross profit was $21.7 million, up 19.8% year over year.

Financial Position

Astec ended 2022 with cash and cash equivalents of $66 million compared with $134.4 million at 2021 end. At the end of 2022, the company’s long-term debt was $78.1 million compared with $0.2 million at the end of 2021.

2022 Performance

Astec reported an adjusted EPS of $1.23 in 2022 compared with $1.38 in the prior year. Earnings missed the Zacks Consensus Estimate of $1.26.
Sales were up 16.3% year over year to $1.27 billion. The top line surpassed the Zacks Consensus Estimate of $1.24 billion.

 

How Have Estimates Been Moving Since Then?

It turns out, estimates review flatlined during the past month.

VGM Scores

Currently, Astec Industries has a subpar Growth Score of D, however its Momentum Score is doing a bit better with a C. Following the exact same course, 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 C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Astec Industries has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.