Astec Industries Inc. (ASTE) reported first-quarter 2013 results with earnings of 57 cents per share, rising 10% from the 52 cents in the year-earlier quarter. It was ahead of the Zacks Consensus Estimate of 53 cents.
Total revenue fell 2% to $247.8 million from $252 million in the year-ago quarter, missing the Zacks Consensus Estimate of $262 million. Domestic sales increased 4% year over year to $161.9 million while international sales declined 11% to $85.9 million.
Cost of sales slid 2% to $189.3 million in the quarter from $193.3 million in the prior-year quarter. Gross profit in the first quarter was $58.6 million, flat year over year. Gross margin expanded 35 basis points year over year to 23.6% in the quarter.
Selling, general, administrative & engineering expenses were $40.4 million in the reported quarter compared with $40.1 million in the year-ago quarter. Income from operations remained flat at $18 million compared with the year-ago quarter. Operating margin remained flat at 7.3% compared with the first quarter of 2012.
Revenues in the Asphalt Group segment went up 4.2% to $71.5 million from $68.7 million in the year-ago quarter. Segment profit declined 51% to $11.1 million from $7.3 million in the prior-year quarter.
Total revenue of the Aggregate and Mining Group segment went down 1% to $90.7 million in the quarter from $91.3 million in the previous-year quarter. Segment profit was $9.1 million in the quarter versus $9.5 million in the prior-year quarter, down 5.4%.
Mobile Asphalt Paving Group segment’s total revenue increased 13% to $47.3 million from $42 million in the year-ago quarter. Segment profit during the quarter rose 7.7% to $4.2 million from $3.9 million in the year-earlier quarter.
Underground Group reported revenues of $14.7 million versus $22.1 million in the year-ago quarter. The segment reported a loss of $2.3 million compared with $173 million a year ago.
All Others reported total revenue of $23.5 million, down 15.8% from $27.9 million in the year-earlier quarter. Segment loss was $8.1 million, narrower than the year-ago quarter’s loss of $9.2 million.
Cash and cash equivalents amounted to $73 million as of Mar 31, 2013, up from $42 million as of Mar 31, 2012. The company has no debt on its balance sheet. Astec’s domestic backlog increased 5% to $167.3 million as of Mar 31, 2013 from $159.7 million as of Mar 31, 2012. The international backlog decreased 6% to $109.2 million as of Mar 31, 2013 from $116.5 million as of Mar 31, 2012.
Astec’s customers depend on government funding for the construction and maintenance of its infrastructural projects. Although a new 27-month Federal highway funding bill was passed in Jul 2012, it was too late in the 2012 construction season to have an impact. Owing to the uncertainty in Federal infrastructure, customers have tightened their budgets. However, with the Federal highway funding bill in place, Astec will benefit from the pick up in construction.
Astec continues to invest significantly in manufacturing new products and upgrading the existing products, which will benefit the company, moving forward. Astec will benefit from a recovery in the economy and the pent up demand for equipment.
Chattanooga, TN-based Astec is a manufacturer of specialized equipment for building and restoring the world's infrastructure. Astec’s peers in the same industry are Terex Corp. (TEX), Joy Global, Inc. (JOY) and The Manitowoc Company, Inc. (MTW).
Astec currently retains a short-term Zacks Rank #4 (Sell).
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