UPDATE 2-Astec Industries Q1 beats; shares hit 18-month high

* Q1 EPS $0.39 vs est $0.21

* Revenue down 6 pct

* Shares jump to 18-month high
(Recasts; adds analyst comments, updates share movement)

By Divya Sharma

BANGALORE, April 20 (BestGrowthStock) – Road construction equipment
maker Astec Industries Inc (ASTE.O: ) posted better-than-expected
first-quarter results, helped by higher margins, sending its
shares up 15 percent to an 18-month high.

Astec also said it has reached the bottom of the economic
cycle and hopes to see modest improvements in the remainder of
the year, helped by increased parts sales and international
sales.

International sales contributed 33 percent of first-quarter
revenue at the company, which makes equipment for asphalt road
building, pipeline and utility trenching.

Astec has been globally competitive because of a relatively
weak dollar and international demand will come from emerging
economies, CJS Securities analyst Jason Ursaner said.

The company, however said that it is experiencing weak
volumes in most of its segments.

“Customers continue to be reluctant to make large
expenditures partly due to the uncertainty regarding state and
federal taxes, healthcare reform, and federal highway
spending,” Chief Executive Don Brock said in a statement.

“I believe volumes will pick up in the second half of the
year if the highway bill is passed,” analyst Ursaner said.

Ambitious plans for overhauling the highway bill, one of
the richest and most popular legislative undertakings for
states, are on hold ahead of congressional elections later this
year.

The company said pent-up demand, especially in its mobile
asphalt group, is driving backlog, which stood at $134.8
million on March 31.

Gross profit margins were 24 percent in the latest quarter,
compared with 21 percent last year, Astec said.

“Gross margins were primarily driven by a greater
percentage of sales from the parts business,” Ursaner said.

For the first quarter, net income was $8.8 million, or 39
cents a share, compared with $7.4 million, or 33 cents a share
a year ago.

Revenue fell 6 percent to $193.5 million. However,
aggregate and mining group revenue rose 14 percent, while
asphalt paving group revenue rose 34 percent.

Analysts on average had expected earnings of 21 cents a
share, before special items, on revenue of $192.2 million,
according to Thomson Reuters I/B/E/S.

Shares of the Chattanooga, Tennessee-based company were
trading up 13 percent at $35.58 Tuesday afternoon on Nasdaq.
They touched a high of $36.39 earlier in the day.

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(Reporting by Divya Sharma; Editing by Roshni Menon, Unnikrishnan Nair)

UPDATE 2-Astec Industries Q1 beats; shares hit 18-month high