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Astec (ASTE) Announces Preliminary Q4 Results, Costs High

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Astec Industries, Inc. ASTE announced preliminary fourth quarter 2021 performance details. The company noted that it experienced strong demand through the quarter and achieved record backlog. However, cost inflation and supply chain related issues impacted its margin in the quarter.

According to Astec’s preliminary results, revenues were $267.8 million for the fourth quarter of 2021. This marked a 12.1% increase from the prior-year quarter. The figure, however, missed the Zacks Consensus Estimate of $287.6 million.

Astec reported a 350 basis points negative impact from manufacturing challenges due to supply chain and logistic disruptions, and pandemic-related labor restrictions. Inflated costs added to the pressure. Astec incurred higher expenses in an effort to meet the elevated demand levels.

The company expects these challenges to persist in the first quarter of fiscal year 2022 as well. Meanwhile, Astec continues to execute its Simplify, Focus and Grow strategy.

Astec is expected to report its fourth-quarter and full-year 2021 results on Feb 28, 2022 before the market opens. The Zacks Consensus Estimate for the company’s earnings for the quarter is currently pegged at 30 cents, indicating a 46% year-over-year drop.

Majority of the players in the Industrial Products sector that have reported their October-December quarter’s earnings have witnessed strong demand. However, inflationary cost pressures and the supply chain constraints have negated some of these gains and impacted their bottom-line performance. The companies have resorted to price hikes and efforts to drive operational efficiency to negate some of these impacts.

Astec’s peer Caterpillar Inc. CAT reported fourth-quarter 2021 revenues of $13.8 billion that beat the Zacks Consensus Estimate of $13.3 billion. The top line improved 23% from the year-ago quarter driven by increasing sales volume, courtesy of higher end-user demand for equipment and services, and favorable price realization. Sales increased across all of its three segments. However, the company witnessed inflated input costs through the quarter that negated some of these gains.

Caterpillar’s adjusted earnings per share was $2.69 in the quarter, which surpassed the Zacks Consensus Estimate of $2.22. The bottom line improved 27% from the prior-year quarter.

Another peer, Terex Corporation TEX is scheduled to report fourth-quarter 2021 results on Feb 10, after market close. The Zacks Consensus Estimate for the TEX’s fourth-quarter revenues is pegged at $947 million, suggesting growth of 20.4% from the year-ago quarter.

The Zacks Consensus Estimate for Terex’s quarterly earnings currently stands at 54 cents per share, suggesting growth of 157.1% from the prior-year period’s reported number. Terex’s fourth-quarter performance is likely to have benefited from robust booking and backlogs across its segments, margin expansion, strong customer demand as well as cost-reduction actions. Higher input costs, primarily of steel, might have affected the company’s margin in the period under review.

Astec’s Price Performance

Zacks Investment Research
Zacks Investment Research

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Astec has declined 7.7% in a year’s time against the industry's growth of 1.3%.

Zacks Rank & a Stock to Consider

Astec currently carries a Zacks Rank #3 (Hold).

A better-ranked stocks in the Industrial Products sector is Packaging Corporation of America PKG, which sports a Zacks Rank #1 (Strong Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Packaging Corp has an estimated earnings growth rate of 11.5% for fiscal 2022. In the past 60 days, the Zacks Consensus Estimate for fiscal 2022 earnings has been revised upward by 12%.

Packaging Corp has a trailing four-quarter earnings surprise of 22.8%, on average. PKG’s shares have gained around 12.5% over a year.


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