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L.B. Foster (FSTR) Sells Chemtec Assets, Updates FY23 Outlook
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L.B. Foster Company (FSTR - Free Report) recently announced the divestment of substantially all the operating assets of its Chemtec Energy Services precision measurement products and systems business to a private buyer. The divested business is located in Willis, TX, and the transaction is expected to result in around $6.6 million in cash proceeds, subjected to adjustments for customary working capital. Over the past 12 months ending on Mar 31, 2023, the business generated revenues of roughly $25 million.
The company also stated that it remains committed to executing its strategic plan by reducing its exposure to the energy market and taking measures to decrease its leverage, especially after the acquisition activity last year. FSTR had a strong first quarter in terms of generating operating cash flow, and the divestiture helped the company to lower its net debt and improve its leverage.
Factoring in the divestiture, the company projects its net sales for the fiscal year ending Dec 31, 2023, to be in the range of $520 million to $550 million, which is down from its previously announced guidance of $540 million-$570 million. L.B. Foster recorded net sales of $497.5 million in 2022.
However, the company anticipates that its adjusted EBITDA will stay unchanged within the range of $27 million to $31 million for the fiscal year.
Shares of L.B. Foster have lost 20.9% against a 4.1% rise recorded by its industry.
Image Source: Zacks Investment Research
Zacks Rank & Key Picks
L.B. Foster currently carries a Zacks Rank #3 (Hold).
Olympic Steel’s shares have gained 39.5% in the past year. The Zacks Consensus Estimate for ZEUS’ current-year earnings has been revised 33.1% upward in the past 60 days. It topped the Zacks Consensus Estimate in all the last four quarters. It delivered a trailing four-quarter earnings surprise of 26.2% on average.
Steel Dynamic’s shares have gained 25.7% in the past year. The Zacks Consensus Estimate for STLD’s current-year earnings has been revised 31% upward in the past 60 days. It topped the Zacks Consensus Estimate in all the last four quarters. It delivered a trailing four-quarter earnings surprise of 11.3% on average.
Linde’s shares have gained 13.5% in the past year. The company has an earnings growth rate of 8.1% for the current year. The Zacks Consensus Estimate for LIN’s current-year earnings has been revised 2.5% upward in the past 60 days.
LIN topped the Zacks Consensus Estimate in all the last four quarters. It delivered a trailing four-quarter earnings surprise of 6% on average.
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L.B. Foster (FSTR) Sells Chemtec Assets, Updates FY23 Outlook
L.B. Foster Company (FSTR - Free Report) recently announced the divestment of substantially all the operating assets of its Chemtec Energy Services precision measurement products and systems business to a private buyer. The divested business is located in Willis, TX, and the transaction is expected to result in around $6.6 million in cash proceeds, subjected to adjustments for customary working capital. Over the past 12 months ending on Mar 31, 2023, the business generated revenues of roughly $25 million.
The company also stated that it remains committed to executing its strategic plan by reducing its exposure to the energy market and taking measures to decrease its leverage, especially after the acquisition activity last year. FSTR had a strong first quarter in terms of generating operating cash flow, and the divestiture helped the company to lower its net debt and improve its leverage.
Factoring in the divestiture, the company projects its net sales for the fiscal year ending Dec 31, 2023, to be in the range of $520 million to $550 million, which is down from its previously announced guidance of $540 million-$570 million. L.B. Foster recorded net sales of $497.5 million in 2022.
However, the company anticipates that its adjusted EBITDA will stay unchanged within the range of $27 million to $31 million for the fiscal year.
Shares of L.B. Foster have lost 20.9% against a 4.1% rise recorded by its industry.
Image Source: Zacks Investment Research
Zacks Rank & Key Picks
L.B. Foster currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the basic materials space are Olympic Steel, Inc. (ZEUS - Free Report) , Steel Dynamics, Inc. (STLD - Free Report) and Linde plc (LIN - Free Report) . LIN currently carries a Zacks Rank #2 (Buy), while ZEUS and STLD sport a Zacks Rank #1(Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Olympic Steel’s shares have gained 39.5% in the past year. The Zacks Consensus Estimate for ZEUS’ current-year earnings has been revised 33.1% upward in the past 60 days. It topped the Zacks Consensus Estimate in all the last four quarters. It delivered a trailing four-quarter earnings surprise of 26.2% on average.
Steel Dynamic’s shares have gained 25.7% in the past year. The Zacks Consensus Estimate for STLD’s current-year earnings has been revised 31% upward in the past 60 days. It topped the Zacks Consensus Estimate in all the last four quarters. It delivered a trailing four-quarter earnings surprise of 11.3% on average.
Linde’s shares have gained 13.5% in the past year. The company has an earnings growth rate of 8.1% for the current year. The Zacks Consensus Estimate for LIN’s current-year earnings has been revised 2.5% upward in the past 60 days.
LIN topped the Zacks Consensus Estimate in all the last four quarters. It delivered a trailing four-quarter earnings surprise of 6% on average.