Despite the rocky political road ahead for a new highway funding bill in Congress, America's biggest paving equipment maker boosted profits from ongoing operations by 51 percent in the fourth quarter and appears poised for further gains in 2014.
Chattanooga-based Astec Industries Inc. said Tuesday it earned $8.3 million, or 36 cents per share, on sales of $223.9 million from continuing operations, in the final three months of 2013. In the same period a year earlier, Asetc earned $5.5 million, or 24 cents per share, on sales of $227.6 million.
Earnings in the fourth quarter were 5 cents per share better than analysts' expectations for the period in spite of the decrease in sales.
For all of 2013, Astec earned $39 million, or $1.69 per share, on sales of $933 million from continuing operations. In the previous year, Astec earned $34 million, or $1.48 per share, on sales of $936.3 million.
Astec CEO Benjamin G. Brock said orders so far in 2014 "have been steady" and the company is developing new products for energy, mining and other infrastructure development.
Astec plans to display 41 new products at the ConExpo show in Las Vegas in early March -- the largest new introduction of products ever for Astec.
"We were pleased with our bottom line results during the fourth quarter of 2013, especially given the continued instability in the federal highway funding," Brock said. "We are continuing our acquisition efforts and will work to add companies that represent strategic fits for our business during 2014."
Brock said he was encouraged about the profit gains in light of the 1.6 percent drop in overall sales.
"If we were to be asked to summarize our feelings about our results for 2013 in a word, the word would be 'improving,'" Brock told industry analysts.
The backlog for Astec is up 10 percent from a year ago "and we're encouraged about opportunities to improve internally going ahead," Brock said.
Astec is gaining from private sector investments in construction and drilling, but government spending on highway projects remains unclear.
"The reality is that the uncertainty created by representatives in Washington, D.C., continues to make our domestic highway infrastructure customers feel uneasy about their major capital expenditures," Brock said. "And this uncertainty remains in place despite the fact that those same customers are seeing marginal improvement in their private sectors."
After the earnings report was released Tuesday, shares of Astec jumped by $1.54 per share, or nearly 4.2 percent, to close at $38.40.
Contact Dave Flessner at firstname.lastname@example.org or at 757-6340.