Chattanooga-based Astec Industries Inc. on Tuesday posted annual sales of more than $1 billion for the first time as its shares have almost doubled in the past year.
While the company's stock fell after its fourth quarter earnings fell a penny a share below analysts' expectations, the paving, mining and building equipment maker's chief executive was upbeat about 2017.
Staff File Photo by Angela Lewis Foster Ridgeland High School students Jacob Rogers, Draven Chapman and Xavier Meyer look at equipment models at Astec Industries subsidiary Astec Inc., during a job fair last year."We ended the year with a record $1.15 billion in sales and a new record backlog at the end of the months of December and January," said Astec CEO Ben Brock. "And that takes a total team effort to execute a very good year, and we look forward to getting even better in 2017."
Astec posted earnings in the fourth quarter of $12.4 million, or 53 cents per diluted share, compared to $3.6 million, or 16 cents per diluted share, in the same period a year ago.
For the full year, earnings were $55.2 million, or $2.38 per diluted share, up 68 percent from the $32.8 million, or $1.42 per diluted share, for 2015.
Astec's shares closed Tuesday at $69.57, down 88 cents, or 1.25 percent on NASDAQ. However, the closing is up about 85 percent from a year ago.
Brock said during a conference call with analysts that Astec has continued to secure and ship orders as a result of the passage of a federal highway spending plan last year in Congress, which allows it to show good results for the quarter and for the year in its traditional business areas.
He said Astec's outlook for 2017 has revenues up 5 percent to 10 percent versus last year with an improved net income for the year.
Astec officials believe that by the end of 2017, the company will have grown sales in the range of 22 percent to 27 percent over the two-year period, along with increased net income, Brock said.
"This would represent strong growth and good performance in our industry segment," he said. "Despite the gains, we still have opportunities to get even better, and our focus will be on increasing gross margins again this year."
Brock said that, in talks with its customers, they like President Donald Trump.
"It feels better, and not just our customers. I mean if you go talking to people in other industries you know they just feel better," he said. "But I think the highway bill and the general private side for our customers is driving it more than just having Trump in office."
The Astec CEO also said that much depends on what President Trump will do concerning a possible infrastructure plan. Another $400 billion or $500 billion in new infrastructure spending would help the company, he said.
At the same time, Astec officials said there are still headwinds to its business.
David Silvious, Astec's chief financial officer, said that international sales for 2016 were $206.2 million for the year compared to $260.9 million in 2015, down 21 percent.
He said that drop occurred primarily in Canada, the Middle East and Africa. while it was partially offset by increases in Japan and Mexico for the year.
"For the year, international sales decreased in each of our groups," Silvious said.
Brock said that headwinds are "still constant." He said the low, yet stabilizing, oil and natural gas prices, the global mining industry collapse, and the strong U.S. dollar all continue to present challenges.
Contact Mike Pare at mpare@timesfreepress.com or 423-757-6318.