Road equipment maker Astec Industries Inc. posted higher-than expected net income for the third quarter with an increase of more than 38 percent over the same period last year. The company’s shares closed at $22.73, up 82 cents from Monday’s close.
The Chattanooga-based company reported on Tuesday its profit rose 38 percent in the third quarter to $16 million, or 71 cents per share, compared with $11.6 million, or 51 cents a share in the July-September period in 2007.
The company posted revenues of $237.4 million for the quarter, compared to $206.2 million for the third quarter in 2007. Astec employs about 1,500 people in Chattanooga.
Astec Industries Inc. employs about 1,500 people in Chattanooga. The company on Tuesday reported revenues of $237.4 million for the third quarter, up from $206.2 million a year ago.
The possibility of a government stimulus package in 2009 could be very important for Astec to boost its business tied to road building, said J. Don Brock, Astec’s president and chief executive officer.
“With our present backlog, we expect a strong finish for the year,” he said. “The growth in the energy and mining portions of our business and the strong possibility of a stimulus package for roads and bridges gives us hope of continued strength and growth in 2009.”
Astec’s diverse portfolio, particularly from international business, is in part responsible for the company’s unexpected rise in earnings and net income during the quarter, said Arnie Ursaner, an analyst with CSJ Securities Inc. in Westchester, N.Y.
“We’re pleasantly surprised by their backlog performance, which remains quite strong,” Mr. Ursaner said. “The underpinnings of growth are international, was a greater percentage of revenues and was also a greater percentage of backlog than historically.”
The company’s backlog of orders at the end of the third quarter was $255.7 million, an increase of 6.6 percent over the same period last year, when the company had $239.9 million in backlog.
Astec’s foreign sales rose 37 percent to 43 percent of its total sales during the quarter. Those increases came from sales in the Middle East, Central America, Asia, South America, Africa, Europe and Canada.