L.B. Foster Profit Misses Estimates; Stock Down - Update

(RTTNews) - L.B. Foster Co. (FSTR) Tuesday reported a swing to profit in the second quarter, due mainly to better gross margins that offset a decline in sales, even as results came in short of Wall Street estimates.

The company softened its outlook for the full year 2013, citing the changing mix in order patterns and the varied profitability of its businesses. Shares of the company slumped 13 percent on the Nasdaq, following the announcement of results.

L.B. Foster makes products for rail, construction, energy and utility markets.

The Pittsburgh, Pennsylvania-based company posted quarterly net income of $7.30 million or $0.71 per share, compared with net loss of $2 million or $0.20 per share last year.

Results for the prior-year quarter included warranty charges of $19 million.

Excluding items, adjusted earnings for the quarter were $8.7 million or $0.86 per share.

On average, three analysts polled by Thomson Reuters expected earnings of $0.97 per share for the quarter. Analysts' estimates typically exclude special items.

Gross margin for the quarter improved to 19.5 percent from 7.6 percent in the prior year.

Net sales for the quarter slid 8 percent to $150 million from $163 million in the prior year.

Rail segment sales fell 10.3 percent year-over-year, on reductions in concrete tie and rail technology businesses. Construction segment was down 8.7 percent on a slump in fabricated bridge business.

Bookings for the quarter slipped 43 percent to $119.7 million.

For the full year, the company estimates earnings of $2.70 to $2.80 per share on sales of $600 and $610 million. Analysts currently expect earnings of $3.11 per share on sales of $632.90 million for the year.

L.B. Foster is currently trading at $40.19, down $6.08 or 13.14%, on a volume of 31 thousand shares.