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Astec's (ASTE) Q4 Earnings Miss, Revenues Beat Estimates

Zacks Equity Research

Astec Industries, Inc. ASTE reported fourth-quarter 2018 earnings per share of 61 cents, up 7% from the prior-year quarter but fell marginally short of the Zacks Consensus Estimate of 62 cents. Including one-time items, the company reported a loss of $2.08 per share against the prior-year quarter’s earnings of 47 cents. 

 

Astec reported adjusted revenues of $317 million in the quarter, up 3% from the year-ago quarter. The top line also beat the Zacks Consensus Estimate of $315 million. The company’s domestic sales increased 1.1% year over year to $248 million. International sales increased 2.8% year over year to $69 million.

 

Adjusted cost of sales remained flat at $241 million. Adjusted gross profit came in at $76 million, up 15% from the year-ago quarter. Gross margin expanded 240 basis points to 24%.

 

Astec Industries, Inc. Price, Consensus and EPS Surprise

 

 

Astec Industries, Inc. Price, Consensus and EPS Surprise

Astec Industries, Inc. price-consensus-eps-surprise-chart | Astec Industries, Inc. Quote

Selling, general, administrative and engineering expenses surged 22% year over year to $55 million. The company reported adjusted operating profit of $21.2 million, declining 1.1% from $21.4 million recorded in the prior-year quarter.

Segment Performance

 

Revenues for the Infrastructure Group segment declined 15% to $125 million from $147 million in the year-ago quarter. The segment reported an operating loss of $70 million, against operating profit of $11 million witnessed in the year-earlier quarter.

 

Total revenues for the Aggregate and Mining Group segment went up 20% year over year to $116 million. Operating profit soared 69% year over year to $10.8 million.

 

The Energy Group segment’s total revenues jumped 10% year over year to $76 million. The segment reported operating loss of $13 million against operating profit of $5.9 million in the year-ago quarter.

 

2018 Results

 

Astec reported adjusted earnings per share of $2.92 in 2018, up 17% from $2.49 in the prior year. Earnings beat the Zacks Consensus Estimate of $2.83. Including one-time items, the company reported a loss of $2.64 per share against earnings of $1.63 per share in the prior-year. Adjusted sales grew 6% year over year to $1.25 billion from 2017. The top line surpassed the Zacks Consensus Estimate of $1.24 billion.

 

Financial Position

 

Astec reported cash and cash equivalents of $26 million at the end of 2018, down from $62 million witnessed at the end of the prior-year. Receivables increased to $134 million as of Dec 31, 2018, from $120 million as of Dec 31, 2017. Inventories were at $356 million as of 2018-end, compared with $120 million as of 2017-end.

 

The company’s total backlog declined around 16% to $345 million as of Dec 31, 2018, from $412 million as of Dec 31, 2017. Backlog improved 12% and 18% in the Aggregate and Mining Group and Energy group, respectively. Backlog in the Infrastructure Group plunged 38%. Domestic backlog decreased 22% year over year to $261 million as of 2018-end, and international backlog advanced 12% year over year to $84 million at the end of the reported quarter.

 

In addition to focusing on execution in its individual segments, the company will continue to make progress in its strategic sourcing initiative and anticipates it to yield positive results in the procurement operations once it is concluded in the second quarter. Astec is also working toward identifying further manufacturing cost optimization opportunities.

 

Share Price Performance

 

Astec’s shares have gained 30.7% year to date, compared with the S&P500’s growth of 11.8%. 

 

Zacks Rank & Stocks to Consider

 

Astec currently carries a Zacks Rank #3 (Hold)

 

Some better-ranked stocks in the Industrial Products sector are Mueller Industries, Inc. MLI, Alarm.com Holdings, Inc. ALRM and Albany International Corp. AIN, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

 

Mueller Industries has expected earnings growth rate of 2.2% for 2019.

 

Alarm.com has expected earnings growth rate of 7.8% for the current year.

 

Albany International has expected earnings growth rate of 44.7% for 2019.

 

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