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Astec Industries, Inc. (NASDAQ:ASTE) reported adjusted earnings of 42 cents per share in fourth-quarter 2017, which declined around 20.8% year over year. Earnings also missed the Zacks Consensus Estimate of 45 cents.
Including an income-tax benefit from the U.S. tax reform, the company posted earnings of 47 cents per share compared to 53 cents reported in the year-ago quarter.
Astec’s total revenues of $312 million slipped 4.3% from $327 million reported in the year-ago quarter. However, revenues beat the Zacks Consensus Estimate of $288 million.
Astec’s domestic sales dipped 7.4% year over year to $245.4 million. However, international sales increased 8.7% year over year to $67 million. Cost of sales escalated 47.6% year over year to $249.6 million. Gross profit came in at $62.8 million, marking a 2.7% decline from $64.5 million reported in the year-ago quarter. Gross margin expanded 40 basis points (bps) year over year to 20.1%.
Selling, general, administrative and engineering expenses edged down 1.4% year over year to $44.8 million. The company reported operating income of $18 million compared with $19 million recorded in the prior-year quarter.
Segment Performance
Revenues for the Infrastructure Group segment dropped 24.4% to $146.7 million from $194.1 million in the year-ago quarter. The segment reported an operating profit of $11.1 million, underlining a plunge of 44.8% from $20.1 million in the year-earlier quarter.
Total revenues for the Aggregate and Mining Group segment increased 17.2% year over year to $96.5 million. Profit declined 5.3% year over year to $6.4 million.
The Energy Group segment’s total revenues jumped 38% year over year to $69.2 million. The segment reported operating profit of $5.9 million, up significantly from $1 million in the year-ago quarter.
2017 Performance
Astec reported earnings per share of $1.63 in 2017, down significantly 31.5% year over year. However, earnings beat the Zacks Consensus Estimate of $1.61.
Revenues in 2017 went up 3.3% year over year to $1.19 billion from $1.15 billion reported in the prior year. Revenues also beat the Zacks Consensus Estimate of $1.16 billion.
Financial Position
Astec reported cash and cash equivalents of $62.3 million as of Dec 31, 2017, down from $82.4 million as of Dec 31, 2016. Receivables increased to $120 million as of Dec 31, 2017, from $110.7 million as of Dec 31, 2016. Inventories were at $391.4 million as of Dec 31, 2017, compared with $360.4 million as of Dec 31, 2016.
The company’s total backlog improved 13.7% to $411.5 million as of Dec 31, 2017 from $361.8 million as of Dec 31, 2016. Backlog improved 31.5% and 35.2% in the Aggregate and Mining Group and Energy group, respectively. Backlog in the Infrastructure Group increased slightly 3.1%. Domestic backlog increased 12.3% year over year to $335.9 million as of Dec 31, 2017 and international backlog improved 20.5% year over year to $75.6 million at the end of the reported quarter.
Share Price Performance
Astec’s shares have significantly underperformed the industry with respect to price performance over the past year. The stock has declined 8.4%, as against 57.1% growth registered by the industry.
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