Astec Industries sales fell by 13% in the three-month period ended June 30, but the Chattanooga-based asphalt equipment maker exceeded analyst forecasts for sales and profits this spring after cutting costs and staff.
Astec said Wednesday its operating earnings in the second quarter fell by 64.4% to $10.9 million on net sales of $265.3 million. Domestic sales decreased 10% in the quarter to $24.7 million and international sales fell by 25.3% to $14.8 million or 25.3% due to COVID-19 related business disruptions this spring.
Astec was forced to idle its plants in Johannesburg, South Africa, and Omagh, Northern Ireland, for about a month due to government-ordered shutdowns and the company closed its facility in Mequon, Wisconsin and shifted that production to other sites. But Astec said all facilities are now back in production.
Over the past year, Astec has cut its staff by 15% and suspended all hiring, except in critical conditions.
"During the second quarter, we continued to make significant progress against our initiatives to Simply, Focus and Grow our business," said Barry Ruffalo, who took over as CEO of Astec in June 2019. "While we remain cautious given the global pandemic, we are well positioned to navigate the economic challenges ahead of us with a more efficient and streamlined organizational structure, a strong balance sheet and ample liquidity."
The results were 5 cents a share better than analysts had predicted and sales were $36.2 million better than what the average consensus of the forecast for the company was for the second period.
Ruffalo said the company's backlog of orders fell by 26.1% from a year ago to $182 million driven by fewer materials and infrastructure solutions orders.
Excluding restructuring charges, adjusted net income rose to of $15.3 million, or 67 cents per share, compared to 37 cents per share second quarter 2019.
Astec said Wednesday it will pay a quarterly dividend of 11 cents per share on Aug. 27 for shareholders of record on Aug. 13. The dividend is comparable with previous quarters.
In response to Wednesday's report, Astec stock jumped by 13.8% to its highest level in more than a year in trading on the Nasdaq Exchange.