Tuesday, L.B. Foster Co. (FSTR), a products and service provider for the rail, construction, energy, and utility markets, reported a decline in profit for the second quarter, hurt by decreased revenues in all its segments. Earnings came in well ahead of Street estimates, while revenues fell short of expectations. FSTR shares were down more than 9% on the Nasdaq.
The Pittsburgh, Pennsylvania-based company's net income for the second quarter plunged to $2.65 million or $0.26 per share from $7.66 million or $0.69 per share in the previous-year quarter.
On average, three analysts polled by Thomson Reuters expected the company to earn $0.40 per share for the quarter. Analysts' estimates typically exclude special items.
Net sales for the quarter decreased 27.8% to $93.77 million from $129.83 million in the year-ago quarter. Analysts were expecting revenue of $107.25 million in the second quarter.
Segment wise, tubular sales were down 44.0%, Rail sales declined 27.2% and Construction Products sales declined by 25.9% from last year. Bookings for the quarter dropped 32.2% to $111.3 million from $164.1 million last year. Backlog was $140.5 million, down 26.9% from last year.
Gross profit margin was 13.7%, down 320 basis points from the prior year quarter, mainly due to a $1.1 million or $0.07 per share warranty charge taken to recognize the revised number of concrete ties that failed in track and $2.6 million or $0.16 per share of unfavorable gross profit adjustments including a sales reversal and inventory write-downs pertaining to a separate concrete tie issue.
Selling and administrative expenses decreased 13.5% to $8.61 million from $9.96 million, reflecting mainly a decrease in incentive compensation expense and lower outside services as well as bad debt expense.
For the first six months of fiscal 2009, net income decreased to $5.67 million or $0.55 per share from $13.96 million or $1.26 per share last year. Sales for six months period dropped to $191.51 million from $223.27 million in the prior-year period.
FSTR is currently trading at $30.32, down $3.09 or 9.25%.
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