Astec Industries Q3 Profit Plunges; Misses Estimates

10/20/2009 8:25 AM ET

(RTTNews) - Infrastructure equipment and components maker Astec Industries, Inc. (ASTE: News ) reported Tuesday a sharp decline in third-quarter profit, reflecting a 30% decrease in sales. On a per share basis, earnings came in much below Street view.

For the third quarter, net income attributable to controlling interest dropped to $3.34 million or $0.15 per share from $15.96 million or $0.71 per share in the previous year. On average, 11 analysts polled by Thomson Reuters expected the company to report earnings of $0.31 per share in the third quarter. Analysts' estimates typically exclude special items.

Net sales for the period declined 30.1% to $166.08 million from $237.44 million in the third quarter of the prior fiscal year. Nine analysts were expecting revenue of $188.31 million in the third quarter.

Domestic sales reduced to $101.3 million from $135.3 million, and International sales dipped to $64.8 million from $102.1 million in the year-ago period.

Citing a 31.5% growth in the Mobile Asphalt Paving Group that partially offset the dip in revenues from the remaining groups, namely Asphalt, Aggregate and Mining, Underground and others, Don Brock, Astec's Chief, said that the company attempted to rightsize each unit.

For the nine-month period, net income were $18.52 million or $0.82 per share, down from $54.55 million or $2.41 per share in fiscal 2008. Sales slid 28% to $560.23 million from $778.22 million.

Brock added, "The failure of Congress to renew the Highway Bill creates uncertainty about future funding impacting capital equipment purchasing behavior. Additionally, continued softness in the residential and commercial real estate markets is resulting in the under utilization of customer equipment and less need for additional or replacement equipment."

The debt-free company expects to see little improvement in domestic sales in the traditionally least profitable fourth quarter and in fiscal 2010, unless the Congress proposes a new Highway Bill.

Astec recorded a backlog of $144.3 million as of September 30, 2009, down 44.9% from $261.9 million a year ago. Over half of the backlog represented international orders.

ASTE closed Monday's regular trading hours at $27.47 on the NASDAQ.