Astec Industries, Inc. (ASTE - Free Report) posted earnings of 62 cents per share in second-quarter 2017, down 22% year over year and also short of the Zacks Consensus Estimate of 80 cents.
The maker of building, paving and mining equipment, posted total revenue of $302 million, rising 2.6% from the $294 million reported in the year-ago quarter. Revenues also missed the Zacks Consensus Estimate of $315 million.
Astec’s domestic sales dipped 2% year over year to $237 million. However, international sales increased 25% year over year to $65 million. Increase in sales in Russia, Europe and Canada were offset by decreases in South America and Africa.
Cost of sales was up 7% year over year to $236 million. Gross profit was at $65.5 million, an 11% decline from $73.4 million reported in the year-ago quarter. Gross margin contracted 330 basis points (bps) year over year to 21.7%. Gross margins were impacted by lower-than-expected margins due to the installation of pellet plant equipment as well as lower margins on several new products. New equipment traditionally carries a lower margin through the early part of its life cycle due to the refining and the manufacturing process.
Selling, general, administrative and engineering expenses went down 2% year over year to $44.2 million. Income from operations plunged 25% year over year to $21.3 million. Operating margin contracted 250 bps year over year to 7.1%.
Astec Industries, Inc. Price, Consensus and EPS Surprise