Astec Industries, manufacturer of products and equipment for infrastructure, aggregates, mining and energy reported its net sales for the first quarter of 2017 were $318.4 million compared to $278.7 million for the first quarter of 2016, a 14 percent increase. Earnings for the first quarter of 2017 were $15.1 million compared to $17.7 million in the first quarter of 2016.
- Domestic sales increased 8 percent to $253.5 million for the first quarter of 2017 from $234.2 million for the first quarter of 2016.
- International sales increased 46 percent to $64.9 million for the first quarter of 2017 from $44.5 million for the first quarter of 2016.
Commenting on the announcement of the quarterly results, Benjamin G. Brock, Chief Executive Officer, stated “We are pleased with our results for the first quarter. 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. Our new products normally carry lower margins early on in their product life cycle. Our ConExpo show expense of $4.3M also affected our net income but resulted in the best ConExpo I have ever attended.
While our year-over-year backlog is down including pellet plant orders, we were able to grow our March 31, 2017 backlog 14 percent excluding all pellet plant orders. The domestic market remained strong for our Infrastructure Group’s products targeted at the road construction industry. Our Aggregate and Mining Group continued to see improvement in the domestic market for products targeted at traditional rock quarries. The market for our equipment continues to be slow on the mining side. Our Energy Group product sales for the infrastructure industry were strong while specialized industrial markets remained steady during the quarter. We continue to experience a slight increase in quote and order activity in the oil and gas markets.
Mr. Brock concluded, “We remain optimistic about 2017. Our backlog at March 31, 2017 was historically very good at $361.8 million. Still, some of these orders are for new equipment designs that have the potential to carry lower margin and/or higher than normal warranty expense in the first half of this year. However, the introduction of new products is essential for our future. While the increase in order activity is a good sign for the year ahead and we have been able to secure international orders in the face of significant headwinds from the strong U.S. dollar, we still face challenges on U.S. exports given the continued strength of the U.S. dollar and in products targeted at the cautious mining industry.”
Full Q1 results press release available here: