With states keeping a lid on new road programs, Astec Industries today reported a 2 percent drop in first quarter sales.
But the Chattanooga-based road and construction equipment maker improved its profit margins in the first three months of 2013. Astec boosted its first quarter earnings from continuing operations by 10 percent over a year ago and ahead of analysts expectations.
Astec said today it earned $13.3 million, or 57 cents per share, on net sales of $247.8 million in the first quarter of 2013. In the same period a year ago, Astec reported earnings of $12 million, or 52 cents per share, on sales of $252 million.
Analysts had expected earnings in the first quarter of this year of 54 cents per share.
"Although our revenues and pre-tax earnings were relatively flat compared to the first quarter of 2012, we were able to improve our gross margin by 30 basis points over the first quarter of 2012 and 250 basis points from the fourth quarter of 2012," Astec CEO Dr. J. Don Brock said in today's quarterly report. "Since the federal research and development tax credit for 2012 was not approved by Congress until early 2013, our first quarter results also include a substantial reduction in our effective tax rate."
Domestic sales increased 4 percent to $161.9 million for the first quarter of 2013 from $155.1 million for the first quarter of 2012. International sales were $85.9 million for the first quarter of 2013 compared to $96.9 million for the first quarter of 2012, a decrease of 11 percent.
Astec's domestic backlog increased 5 percent while its international backlog fell by 6 percent, Brock said.
"We continue to see challenging domestic market conditions due to shortfalls in tax revenues in most states," he said. "International business is also hampered by economic and political uncertainty in many of the markets we serve. In spite of the lack of strong Federal highway funding and general uncertainty in the world economy, we are pleased that we have maintained our profitability and market share."