Despite a 14 percent rise in sales in the first quarter, Astec Industries Inc. said today that its net income in the first three months of 2017 were down 16 percent from a year ago and were three cents per share below analysts' expectations.
The Chattanooga-based asphalt and heavy equipment maker said today it earned $15.1 million, or 65 cents per share, on sales of $318.4 million in the first quarter. A year ago, Astec earned $17.7 million, or 77 cents per share, on sales of $278.7 million.
The results in the first quarter of this year missed Wall Street expectations. The average estimate of five analysts surveyed by Zacks Investment Research was for earnings of 68 cents per share.
Sales were ahead of Wall Street projections, however, and Astec CEO Ben Brock said he was pleased with the overall results.
"We were able to grow revenues and, as expected, our gross margins were lower than usual, mainly due to new products being manufactured in many of our facilities," Brock said in a statement today. "Our new products normally carry lower margins early on in their product life cycle. Our ConExpo show expense of $4.3 million also affected our net income but resulted in the best ConExpo I have ever attended."
Astec sales of its pellet plants were down, but the backlock of orders is up 14 percent.
"The domestic market remained strong for our Infrastructure Group's products targeted at the road construction industry," Brock said.
Astec Industries shares have decreased 6 percent since the beginning of the year. But Astec stock has climbed 34 percent in the last 12 months.