Astec Industries Inc. boosted earnings in the second quarter by 31 percent as sales of the Chattanooga-based paving equipment maker rose 12 percent this spring over the same period a year ago.
But Astec CEO Ben Brock cautioned Tuesday that short-term prospects remain challenged by the lack of a new highway funding measure from Washington, D.C.
Astec said net sales for the second quarter of 2014 were $277.3 million, up from the $248.1 million in the second quarter of 2013. Earnings for the second quarter of 2014 were $14.5 million, or 63 cents per share, compared to $11.1 million, or 48 cents per share, for the second quarter of 2013.
Earnings were a penny per share better than the average analysts' forecast for the period.
"While we are up on sales and profit versus last year, we are cautious regarding our short-term prospects, particularly as they relate to infrastructure spending," Brock said in a statement. "Washington continues to pursue short-term extensions in lieu of a long-term funding bill that would provide visibility to our customers for their capital spending."
The U.S. Senate is expected to vote as soon as today on the $10.9 billion House measure extending transportation funding until the spring. The Department of Transportation's Highway Trust Fund, which is used to reimburse states for large infrastructure projects, had been forecasted to run out of money next month, unless Congress approves at least a temporary funding extension.
While highway projects are stalled, Brock said the private market is improving and some states are boosting highway spending.
"We look forward to improving market conditions as our energy, aggregate, and mining businesses see stable to slightly better business in the near term," Brock said.
Shares of Astec rose 32 cents per share, or 0.8 percent, in Nasdaq trading to close at $40.27.