* Q3 EPS $0.32 vs est $0.24
* Q3 rev $177.9 mln vs est $185.1 mln
(Adds analysts’ comments; updates share movement)
By Divya Sharma
BANGALORE, Oct 19 (Reuters) - Road construction equipment maker Astec Industries Inc (ASTE.O) posted better-than-expected quarterly profit, but said weakness in its domestic sales could continue for another 12-24 months if the new Highway Bill is not passed.
Fewer states are putting out projects to bid as a $286 billion highway bill -- one of the richest and most popular legislative undertakings for states -- is on hold.
Shares of the company fell as much as 6 percent in morning trade, but recouped some of their losses and were trading down 1 percent at $31.05 in afternoon on Nasdaq.
“The initial reaction was weak topline, but now as (investors) digest material they are focusing on margin improvement and some international business still coming the company’s way despite the uncertainity surrounding the highway bill,” Griffin Securities analyst Morris Ajzenman said.
Astec, which makes equipment for asphalt road building, pipeline and utility trenching, said it is focussing on growing international sales to combat weakness in the domestic market.
The need for infrastructure buildup internationally is much stronger than the domestic market, so there does not seem any major impediment to growing the international segment, Ursaner said.
Ajzenman said he is optimistic and expects a decision regarding the highway bill to be taken in the next six months.
Last time the highway bill was put on hold was six years ago and it was for 20-21 months, Ajzenman said adding that October was only the 13th month after the highway bill was put on hold this time.
Net income for the third quarter more than doubled to $7.4 million, helped in part by the downsizing Astec did in 2009.
Revenue rose 7 percent to $177.9 million. International sales rose 22 percent to $79.3 million, while domestic sales fell 3 percent to $98.6 million.
Gross profit margin for the quarter rose to 23.6 percent compared with 20.9 percent a year ago, helped by better capacity utilization.
Analysts on average had expected earnings of 24 cents a share, before special items, on revenue of $185.1 million, according to Thomson Reuters I/B/E/S.
Shares of the Chattanooga, Tennesse-based company have gained 16 percent in value in less than a month, excluding Tuesday’s trading.
Reporting by Divya Sharma in Bangalore; Editing by Jarshad Kakkrakandy