Astec Industries profits drop 71 percent

Lack of highway bill, higher taxes hurt company earnings

photo Astec Industries Inc. officials demonstrate a piece of paving equipment.

Profits for paving equipment maker Astec Industries, Inc. hit a pothole in the third quarter, falling 71 percent from year-ago levels and dropping well below analysts expectations for the summer period.

Astec said today it earned $1.9 million, or 8 cents per share, in the third quarter. A year ago in the same period, Astec earned $6.5 million, or 28 cents per share. Analysts had projected the company would earn somewhere between 34 cent and 52 cents per quarter in the current quarter.

Astec CEO Ben Brock said in a statement that he was disappointed in the results, which he blamed on the lack of a federal highway bill and tax rules that bumped Astec's effective income tax rate in the quarter to 64 percent.

"Our Energy and our Aggregate and Mining Groups performed OK while our Infrastructure Group lagged due primarily to the lack of a federal highway bill, pricing pressure as a result, and product mix," Brock said in a statement. "A 64 percent tax rate for the quarter was another challenge to our earnings in the quarter."

Nonetheless, Brock said the outlook is improving for Astec with a growing backlog, improved parts sales and expected cost improvements from lean manufacturing initiatives.

Domestic sales increased for Astec in the quarter by 8 percent from a year ago to $142.6 million. International sales decreased 4 percent to $77.6 million this summer compared with a year ago.

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