ASTE's Q2 Earnings Miss Estimates on Higher Interest Expense

Astec Industries Inc. ASTE reported adjusted earnings of 94 cents per share for the second quarter of 2026, up 4.4% year over year but missed the Zacks Consensus Estimate of $1.05 by 10.5%. 

Including one-time items, earnings per share in the quarter were 45 cents compared with 72 cents in the year-ago quarter.

Net sales increased 23.6% year over year to $408.1 million and surpassed the Zacks Consensus Estimate of $403 million by 1.2%. The increase was primarily driven by net favorable volume and mix, along with favorable pricing that generated increases in equipment sales of $42.6 million and parts and service revenues of $35 million. Sales from acquired businesses also contributed $48.6 million in net sales.

Astec ended the quarter with a backlog of $601 million, reflecting a 58% year-over-year increase led by strong demand for aggregate processing equipment. Materials Solutions backlog surged 150.6% to $312.5 million, while Infrastructure Solutions segment’s backlog increased 12.7% to $288.6 million. Overall implied orders reached roughly $460 million in the quarter, up 6.7% sequentially, while the consolidated book-to-bill ratio was 113%. 

ASTE’s Adjusted Operating Profit Up Y/Y Despite Cost Pressure

Cost of sales rose 24.5% year over year to $301.3 million. Gross profit increased 20.9% year over year to $106.8 million. Net favorable volume and mix, coupled with favorable pricing and lower warranty program, were partially offset by manufacturing inefficiencies and the impact of inflation on materials, labor and overhead. However, gross margin contracted to 26.2% from 26.7%.

Selling, general and administrative expenses increased 27.6% to $85.5 million. The rise reflected amortization of acquired intangibles, higher personnel, technology and support costs, dealer commissions as well as increased costs related to Astec’s strategic transformation program.
The company reported operating profit of $20.4 million in the second quarter of 2026 compared with $21.4 million in the second quarter of 2025.

Adjusted operating income advanced 31.3% to $35.2 million, while adjusted operating margin expanded 50 basis points to 8.6%. Adjusted EBITDA climbed 26% to $42.6 million, with the corresponding margin improving 20 basis points to 10.4%.

Interest expense soared 238% year over year to $7.1 million primarily due to higher average outstanding borrowings along with increased interest rates on the 2025 Credit Facility compared with Astec’s previous credit facility. 

Astec's Materials Solutions Drives Growth

Materials Solutions net sales gained 43% year over year to $179.8 million, reflecting stronger dealer and customer demand for aggregate crushing, screening and conveying equipment. Segment operating adjusted EBITDA rose 54.5% to $22.1 million. The segment's operating adjusted EBITDA margin expanded 90 basis points to 12.3%.

Implied orders for the segment increased 45.3% sequentially to $255.7 million, leading to a book-to-bill ratio of 142.2%. Materials Solutions backlog soared 150.6% year over year to $312.5 million at the second-quarter end. 

ASTE's Infrastructure Orders Face Timing Pressure

The Infrastructure Solutions segment generated sales of $228.3 million, up 11.6% year over year. Growth was supported by sustained demand in concrete, mobile paving and forestry equipment, and inorganic contributions. Segment operating adjusted EBITDA increased 2.2% to $32.9 million. The segment margin contracted 130 basis points to 14.4%.

Implied orders fell 20% sequentially to $204.3 million, and the book-to-bill ratio stood at 89.5%. Astec attributed the weakness primarily to conservatism among certain asphalt plant customers. Infrastructure backlog still increased 12.7% to $288.6 million. 

Astec's Aftermarket Business Gains Momentum

Parts and service sales increased 34.8% year over year to $135.5 million. These revenues represented 33.2% of second-quarter net sales and 35% of sales for the first half of 2026. 

ASTE's Cash Flow and Liquidity Stay Healthy

For the first six months of 2026, operating cash flow increased to $52.8 million from $33.4 million, while free cash flow rose to $37.3 million from $25.6 million.  For the first half of fiscal 2026, capital expenditures increased to $15.5 million from $7.8 million in the prior-year period.

Total liquidity was $265.8 million, comprising $75.7 million of cash available for operating purposes and $190.1 million of revolver availability. Net debt to trailing 12-month adjusted EBITDA was about 2.2x, remaining within management’s stated 1.5-2.5x target range.

Astec Cuts 2026 Adjusted EBITDA Guidance

Astec lowered its full-year 2026 adjusted EBITDA guidance to $160-$175 million from its previous projection of $170-$190 million. Management cited macro-driven factors affecting the timing of asphalt plant shipments within Infrastructure Solutions. 

The company nevertheless described the overall Infrastructure Solutions market as healthy, with solid concrete-equipment demand and improvement in forestry and mobile paving. In Materials Solutions, management expects federal, state and local infrastructure projects, along with data-center construction, to support multi-year demand for aggregate equipment. 

Astec Stock’s Price Performance & Zacks Rank

Over the past six months, Astec stock declined 23.3% against the industry’s 12% growth. 

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Astec carries a Zacks Rank #5 (Strong Sell) at present. 

How did Astec’s Industry Peers Perform in the Quarter?

Caterpillar Inc. CAT reported adjusted earnings of $8.17 per share for the second quarter of 2026, up 73% year over year. The figure surpassed the Zacks Consensus Estimate of $6.25 by 30.72%. Higher sales volume and favorable price realization supported the performance.

Including one-time items, Caterpillar’s earnings per share were $7.77 compared with $4.62 in the year-ago quarter.

Sales and revenues increased 24% to $20.5 billion and topped the consensus estimate of $19.3 billion by 6.37%. The quarter marked Caterpillar’s first-ever revenue total above $20 billion. Caterpillar currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here.

Komatsu KMTUY reported earnings per share of 67 cents for the quarter ended June 30, 2026, surpassing the Zacks Consensus Estimate of 59 cents. Earnings, however, declined 3% year over year. 

Komatsu’s revenues came in at around $6.54 billion, marking a 4% rise on a year-over-year basis. Its Construction, Mining & Utility Equipment sales increased 14.4% in the quarter, while Industrial Machinery & Others sales rose 21.7%. Komatsu currently carries a Zacks Rank #2 (Buy).

Terex Corporation TEX reported second quarter 2026 earnings per share of $1.37, beating the Zacks Consensus Estimate of $1.25. The figure marked an 8% decline from the year-ago quarter. 

Terex’s revenues increased 51% year over year to $2.24 billion, which surpassed the Zacks Consensus Estimate of $2.14 billion. Terex currently carries a Zacks Rank #3 (Hold).

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