Astec Industries reported third-quarter 2014 sales rose 3 percent over 2013, and earnings declined 71 percent.
U.S. sales were $142.6 million, and international were $77.6 million. Year-to-date sales are up 4 percent with earnings down 16 percent.
Gross profit for the third quarter of 2014 was $43.3 million or 19.7 percent compared to $45.8 million or 21.5 percent for the third quarter of 2013, a decrease of $2.5 million or 180 basis points. The decrease is attributable to the Infrastructure Group with the Aggregate and Mining Group and the Energy Group meeting or exceeding third quarter of 2013 gross profit levels. The Infrastructure Group’s gross profit was negatively impacted by a reduction in sales volume combined with pricing pressures in the infrastructure market.
Commenting on the announcement of quarterly results, Benjamin G. Brock, president/CEO, said, “We are disappointed in our net income for the third quarter. Our Energy and our Aggregate and Mining Groups performed okay while our Infrastructure Group lagged due primarily to the lack of a federal highway bill, pricing pressure as a result, and product mix. As we’ve previously reported, we are still unable to recognize the revenue associated with our new $60 million pellet plant. This lack of recognition continues to hamper the Infrastructure Group’s 2014 operating results.
“Despite our third-quarter results, we are encouraged about our overall business prospects for the remainder of the year and 2015. Our backlog is up 28 percent versus last year with increases in both domestic and international markets. Also, our higher margin parts sales have recovered and are ahead of last year’s pace. These developments, along with our focus on lean initiatives, lead us to feel optimistic about both sales growth and margin improvement.”