CORRECTED-Road building equipment maker Astec's Q2 sales miss estimates, adjusted EPS beats

Overview

• Astec Q2 net sales fall 4.4% yr/yr, missing analyst expectations

• Adjusted EPS for Q2 beats consensus, reflecting improved operational efficiency

• Co completes acquisition of TerraSource, expected to boost future earnings

Outlook

• Astec updates full-year adjusted EBITDA guidance to $123 mln-$142 mln

• Company expects TerraSource to contribute $13 mln-$17 mln in H2 adjusted EBITDA

Result Drivers

• INFRASTRUCTURE CHALLENGES - Net sales in Infrastructure Solutions fell 7.6% due to weak demand for mobile paving and forestry equipment

• OPERATIONAL EFFICIENCIES - Co attributes growth in adjusted EBITDA and EPS to enhanced manufacturing and procurement efficiencies

• TERRASOURCE ACQUISITION - Acquisition completed, expected to boost earnings with strong aftermarket parts revenue

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 1 "strong buy" or "buy", 1 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the heavy machinery & vehicles peer group is "buy"

• Wall Street's median 12-month price target for Astec Industries Inc is $43.00, about 6.1% above its August 5 closing price of $40.39

• The stock recently traded at 14 times the next 12-month earnings vs. a P/E of 14 three months ago

Press Release: ID:nGNX5LH7RP