J. Don Brock, right, and his son Ben stand near a piece of machinery manufactured by their company, Astec Industries, in Chattanooga, Tenn.Astec Industries was one of the biggest losers on Wall Street Tuesday after the Chattanooga-based paving and construction equipment maker reported lower-than-expected earnings for the first quarter.
Astec’s stock dropped by more than 4.4 percent in an otherwise upbeat day of trading overall on the Nasdaq exchange Tuesday. Astec reported that first quarter net income was down 28 percent from a year ago to $9.5 million, or 41 cents per share. Analysts had expected Astec to earn 57 cents per share in the period.
Astec stock traded down $1.92 per share Tuesday to close at $41.51 per share. The drop shed nearly $44 million of market value from Astec Tuesday despite reassurances from company executives that margins continue to improve for Astec. The company was hurt by one-time expenses for an industry trade show in Las Vegas and the end of R&D tax credits, which combined cost the company 17 cents per share.
“Although total sales decreased slightly, we held our gross margin steady which is a testament to our focus on lean manufacturing and cost management,” Astec CEO Ben Brock said. “Our focus on operations is resulting in better earnings for ongoing operations for the second quarter in a row.”
Nonetheless, Brock said the company “is not satisfied” with the sales decline in the first quarter and expects shipments to improve this spring.