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Why Is Astec (ASTE) Down 7.6% Since the Last Earnings Report?
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A month has gone by since the last earnings report for Astec Industries, Inc. (ASTE - Free Report) . Shares have lost about 7.6% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Astec Lags Earnings, Tops Revenue Estimates in Q4
Astec posted earnings of $0.53 per share in fourth-quarter 2016, soaring 231% year over year; however fell short of the Zacks Consensus Estimate of $0.54.
The maker of building, paving and mining equipment Astec, posted total revenue of $327 million, rising 52% from the $215 million reported in the year-ago quarter. Revenues beat the Zacks Consensus Estimate of $274 million.
Astec’s domestic sales jumped 65% year over year to $265 million. International sales also increased 13% year over year to $62 million.
Cost of sales was up 54% year over year to $262 million. Gross profit of $64.5 million advancedfrom $45 million reported in the year-ago quarter. Gross margin contracted130 basis points (bps) year over year to 19.7%.
Selling, general, administrative and engineering expenses went up 11.5% year over year to $45.4 million. Income from operations surged305% year over year to $19 million. Operating margin expanded 360 bps year over year to 5.8%.
Segment Performance
Revenues for the Infrastructure Group segment advanced 111% to $194 million from $91.9 million in the prior-year quarter. Segment profit improved an impressive 354.7% year over year to $20 million.
Total revenue for the Aggregate and Mining Group segment declined 3% year over year to $82.4 million. Profit improved 28% year over year to $6.7 million.
The Energy Group segment’s total revenue increased 31.8% to $50 million from $38 million in fourth-quarter 2015. The segment reported operating profit of $0.9 million, up from $0.8 million in the year-ago quarter.
Financial Position
Astec reported cash and cash equivalents of $82.4 million at the end of 2016, up from $25 million as of Dec 31, 2015. Receivables increased to $110.7 million as of Dec 31, 2016, from $102 million as of Dec 31, 2015. Inventories went down to $360 million as of Dec 31, 2016, from $384.8 million as of Dec 31, 2015.
Astec’s total backlog increased 13% to $357.4 million at the end of 2016 from $315.9 million at 2015 end. Domestic backlog went up 13% year over year to $294.8 million as of Dec 31, 2015 and international backlog improved 16% year over year to $62.6 million at the end of 2016.
2016 Performance
Astec posted earnings of $2.38 per share for 2016, up 68% year over year. Earnings missed the Zacks Consensus Estimate of $2.40. Revenues for full-year 2016 increased 17% year over year to $1.15 billion. Revenues beat the Zacks Consensus Estimate of $1.1 billion.
Outlook
Astec’s Aggregate and Mining group is expected to improve in the domestic market for products targeted at traditional rock quarries while the mining market continued to be slow. In Energy group the company experienced an increase in quote and order activity in the oil and gas markets.
Given these positive developments, and order activity in Jan 2017, Astec remains optimistic about 2017. While the increase in order activity is a good sign for the year ahead, the company still faces significant challenges on the U.S. exports given the sustained strengthening of the U.S. dollar.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimates. There have been four revisions lower for the current quarter. In the past month, the consensus estimate has shifted lower by 22.1% due to these changes.
At this time, Astec's stock has a strong Growth Score of 'A', though it is lagging a lot on the momentum front with an 'F'. However, 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 'B'. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate that the stock is more suitable for growth investors than value investors.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of this revision also indicates a downward shift. Notably, the stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.
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Why Is Astec (ASTE) Down 7.6% Since the Last Earnings Report?
A month has gone by since the last earnings report for Astec Industries, Inc. (ASTE - Free Report) . Shares have lost about 7.6% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Astec Lags Earnings, Tops Revenue Estimates in Q4
Astec posted earnings of $0.53 per share in fourth-quarter 2016, soaring 231% year over year; however fell short of the Zacks Consensus Estimate of $0.54.
The maker of building, paving and mining equipment Astec, posted total revenue of $327 million, rising 52% from the $215 million reported in the year-ago quarter. Revenues beat the Zacks Consensus Estimate of $274 million.
Astec’s domestic sales jumped 65% year over year to $265 million. International sales also increased 13% year over year to $62 million.
Cost of sales was up 54% year over year to $262 million. Gross profit of $64.5 million advancedfrom $45 million reported in the year-ago quarter. Gross margin contracted130 basis points (bps) year over year to 19.7%.
Selling, general, administrative and engineering expenses went up 11.5% year over year to $45.4 million. Income from operations surged305% year over year to $19 million. Operating margin expanded 360 bps year over year to 5.8%.
Segment Performance
Revenues for the Infrastructure Group segment advanced 111% to $194 million from $91.9 million in the prior-year quarter. Segment profit improved an impressive 354.7% year over year to $20 million.
Total revenue for the Aggregate and Mining Group segment declined 3% year over year to $82.4 million. Profit improved 28% year over year to $6.7 million.
The Energy Group segment’s total revenue increased 31.8% to $50 million from $38 million in fourth-quarter 2015. The segment reported operating profit of $0.9 million, up from $0.8 million in the year-ago quarter.
Financial Position
Astec reported cash and cash equivalents of $82.4 million at the end of 2016, up from $25 million as of Dec 31, 2015. Receivables increased to $110.7 million as of Dec 31, 2016, from $102 million as of Dec 31, 2015. Inventories went down to $360 million as of Dec 31, 2016, from $384.8 million as of Dec 31, 2015.
Astec’s total backlog increased 13% to $357.4 million at the end of 2016 from $315.9 million at 2015 end. Domestic backlog went up 13% year over year to $294.8 million as of Dec 31, 2015 and international backlog improved 16% year over year to $62.6 million at the end of 2016.
2016 Performance
Astec posted earnings of $2.38 per share for 2016, up 68% year over year. Earnings missed the Zacks Consensus Estimate of $2.40. Revenues for full-year 2016 increased 17% year over year to $1.15 billion. Revenues beat the Zacks Consensus Estimate of $1.1 billion.
Outlook
Astec’s Aggregate and Mining group is expected to improve in the domestic market for products targeted at traditional rock quarries while the mining market continued to be slow. In Energy group the company experienced an increase in quote and order activity in the oil and gas markets.
Given these positive developments, and order activity in Jan 2017, Astec remains optimistic about 2017. While the increase in order activity is a good sign for the year ahead, the company still faces significant challenges on the U.S. exports given the sustained strengthening of the U.S. dollar.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimates. There have been four revisions lower for the current quarter. In the past month, the consensus estimate has shifted lower by 22.1% due to these changes.
Astec Industries, Inc. Price and Consensus
Astec Industries, Inc. Price and Consensus | Astec Industries, Inc. Quote
VGM Scores
At this time, Astec's stock has a strong Growth Score of 'A', though it is lagging a lot on the momentum front with an 'F'. However, 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 'B'. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate that the stock is more suitable for growth investors than value investors.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of this revision also indicates a downward shift. Notably, the stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.