Astec Industries Inc. boosted its sales by 18.1% in the third quarter, but profits for the Chattanooga-based paving and road construction equipment manufacturer fell by more than 41% from a year ago and were below what Wall Street had expected.
Astec reported Wednesday that its adjusted net income totaled $6.5 million, or 28 cents per share, on sales of $315.2 million in the third quarter of 2022. In the same period a year ago, Astec reported adjusted net income of $11.1 million, or 48 cents per share, on sales of $266.9 million.
The results were 3 cents a share below Zacks Consensus Estimate and shares of Astec, which are already down by nearly 40% so far this year, were down by another 5% in initial trading Wednesday morning on the Nasdaq exchange.
The third quarter was the second consecutive quarter in which Astec results have come in below what analysts had forecast.
The global manufacturer of road building equipment said sales and backlog increased in the three months ending Sept. 30, but profit margins were down.
"We are pleased to have net sales growth through volume, price realization and mix in both the Infrastructure Solutions and Materials Solutions groups," Barry Ruffalo, chief executive of Astec, said in an earnings report released before the market opened Wednesday. "Customer demand for Astec products continues to drive increased backlog, which grew year-over-year and sequentially."
Ruffalo said the delivery of supplies is improving, but he said manufacturing is being hit with '"a still fragile supply chain" and "inconsistent vendor deliveries."
"Despite the challenges, the resilience of our customers and employees, along with our strong balance sheet and the multi-year tailwind provided by the long-term federal highway bill, continue to provide stability," Ruffalo said. "We are confident in the long-term value our Simplify, Focus and Grow strategy will create for Astec stakeholders."