Yahoo Finance Astec Industries (ASTE) Down 5.1% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for Astec Industries (ASTE). Shares have lost about 5.1% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Astec Industries due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Astec Q1 Earnings Top Estimates, Revenues Rise Y/Y
Astec Industries reported first-quarter 2023 adjusted earnings per share of 90 cents, surpassing the Zacks Consensus Estimate of 59 cents. The bottom line also marked a 119.5% improvement from earnings per share of 41 cents reported in the prior-year quarter.
Favorable net volume, pricing and mix helped negate the impact of inflation, manufacturing inefficiencies, increased selling, general and administrative expenses and restructuring charges, leading to the better-than-expected earnings.
Including one-time items, the company’s earnings of 53 cents per share in the quarter under review compared with earnings of 18 cents per share in the year-ago quarter.
Revenues & Backlog
Astec’s revenues increased 19.5% year over year to $348 million in the quarter under review driven by changes in volume, pricing and mix of sales that generated increases in equipment sales, service and equipment installation, parts and component sales and freight revenue. The top line beat the Zacks Consensus Estimate of $336 million. Domestic sales were up 20% year over year and International sales were up 17.5%.
Given the strong demand, Astec reported a backlog of $800 million in the first quarter of 2023, marking a year-over-year decline of 4%. Domestic backlog slipped 3% year over year to $686 million, while international backlog was down 10.3% to $114 million.
Operating Performance
The cost of sales rose 14% year over year to $259 million in the first quarter. The gross profit was $89 million, compared with the year-ago quarter’s $65 million. The adjusted gross margin was 25.6% compared with the year-ago quarter’s 22.2%.
Selling, general, administrative and engineering expenses increased 13.7% year over year to around $68 million. The company reported an adjusted operating income of $28.5 million, a notable increase from $10.9 million in the prior year. The adjusted operating margin was 6.2%, compared with 3.7% in the prior-year quarter.
Adjusted EBITDA was $35.2 million in the reported quarter, up from the year-ago quarter’s $18.8 million. The adjusted EBITDA margin was 10.1%, compared with 6.5% in the previous year’s comparable quarter.
Segment Performance
Revenues in the Infrastructure Solutions segment were up 16% to $230 million from the year-ago quarter. The segment’s adjusted EBITDA was $27.3 million, compared with the prior-year quarter’s $16.4 million.
The Materials Solutions segment’s total revenues were $114 million in the quarter under review, marking a year-over-year increase of 22%. The segment’s adjusted EBITDA was $15.3 million, up 25.4% year over year.
Financial Position
Astec ended the first quarter of 2023 with cash and cash equivalents of $42.5 million, compared with $66 million at the end of fiscal 2022. At the end of the first quarter, the company’s long-term debt was $65 million, compared with $78 million at the end of 2022. The company used $19.2 million of cash in operating activities as it carried additional inventories to satisfy customer demand. This compared with an outflow of $9.6 million in the prior year quarter.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended upward during the past month.
VGM Scores
Currently, Astec Industries has an average Growth Score of C, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Astec Industries has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
Astec Industries is part of the Zacks Manufacturing - Construction and Mining industry. Over the past month, Terex (TEX), a stock from the same industry, has gained 4.2%. The company reported its results for the quarter ended March 2023 more than a month ago.
Terex reported revenues of $1.24 billion in the last reported quarter, representing a year-over-year change of +23.3%. EPS of $1.60 for the same period compares with $0.74 a year ago.
For the current quarter, Terex is expected to post earnings of $1.61 per share, indicating a change of +50.5% from the year-ago quarter. The Zacks Consensus Estimate has changed +9% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #1 (Strong Buy) for Terex. Also, the stock has a VGM Score of C.
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Astec Industries, Inc. (ASTE) : Free Stock Analysis Report
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