Shares of Astec Industries Inc. fell 6.77 percent Tuesday to $25.61 a share after the company reported a slump in revenues and profits for its third quarter.
The Chattanooga-based maker of road-building equipment reported revenues of $166 million in the third quarter, a decline of 30 percent from $237 million during the third quarter one year ago.
During the quarter, Astec's net income attributable to controlling interest fell 79 percent to $3.3 million or 15 cents per diluted share compared with $16 million or 71 cents per diluted share in the same period in 2008.
The company's chief executive, J. Don Brock, said Astec's customers remain cautious and are reluctant to make major purchases in the current economic environment.
"The failure of Congress to renew the highway bill creates uncertainty about future funding impacting capital equipment purchasing behavior," Mr. Brock said.
The company reported domestic sales of $101.3 million during the third quarter of the year compared with $135.3 million during the third quarter of 2008. International sales also fell, with the company reporting $64.8 million during the quarter compared with $102.1 million in the same period last year.
Analyst Arnie Ursaner with CJS Securities said Mr. Brock and investors are disappointed with the quarter, and that the company is much more cautious on its outlook for the final quarter of the year and for next year.
"There is a tremendous amount of uncertainty on the domestic part of their business," Mr. Ursaner said. "They are hopeful that the international piece will show 40 percent growth next year and offset the weakness expected in the domestic side."
A combination of factors will bring a very flat 2010, Mr. Ursaner said. They include very strong growth on the international front combined with a weak dollar offset by very slow trends domestically and the delay of the highway bill.