Astec Industries Q3 Earnings Call Highlights

Key Points

• Astec cut its 2026 adjusted EBITDA outlook to $140 million–$150 million from $160 million–$175 million, citing delayed asphalt plant shipments and material costs rising faster than prices. Management said $5 million–$10 million of the reduction reflects shipments moving into 2027, with no customer cancellations reported.
• Third-quarter sales edged up 0.7% to $352.4 million, but adjusted EBITDA fell 30.3% to $18.9 million and adjusted EPS shifted to a $0.01 loss from $0.47 profit a year earlier.
• Backlog rose 49.2% year over year to $670.5 million, and management expects record fourth-quarter shipments and adjusted EBITDA of $48 million–$58 million, above the year-ago quarter.

Astec Industries NASDAQ: ASTE lowered its full-year 2026 adjusted EBITDA outlook after third-quarter results fell short of management’s expectations, as delayed asphalt plant shipments and rising material costs weighed on profitability.

The construction equipment manufacturer now expects adjusted EBITDA of $140 million to $150 million for the year, down from its previous forecast of $160 million to $175 million. Management said a rebound in orders and deliveries from backlog should support a stronger fourth quarter and early 2027.

Third-quarter net sales rose 0.7% from a year earlier to $352.4 million, while adjusted EBITDA fell 30.3% to $18.9 million. Adjusted EBITDA margin declined to 5.4% from 7.7%, and adjusted earnings per share swung to a loss of $0.01 from a profit of $0.47.

CEO Jaco van der Merwe said a slowdown in asphalt plant orders lasted longer than expected, affecting the mix of shipments and invoicing. Higher steel and other material costs also outpaced pricing because of extended delivery lead times. He characterized the pressures as temporary rather than structural, citing recovering orders and underlying demand.

Pricing gap and shipment delays

Cost inflation exceeded pricing by about 200 basis points in the quarter, with an impact of roughly $7 million to $8 million, according to van der Merwe. He said the gap should narrow in the fourth quarter and begin to return to parity in the first quarter of 2027 as price increases take effect.

Most customer contracts have fixed prices, van der Merwe said, although some include provisions for adjustments in circumstances such as major tariff changes. He estimated that $5 million to $10 million of the reduction in the company’s outlook was attributable to shipments shifting into 2027.

Some customers moved selected asphalt plant deliveries to the fourth quarter of 2026 and the first quarter of 2027. Asked whether the shifts involved cancellations, van der Merwe said the company had not had any cancellations.

He said customers had been cautious amid changes in oil prices, inflation and election uncertainty, but continued to have work and had shown confidence in placing orders. Astec expects the fourth quarter to be a record for shipments, he said, adding that its first-quarter asphalt production schedule was already full.

Backlog grows as segment orders diverge

Consolidated backlog rose 49.2% year over year to $670.5 million at quarter end and increased 11% from the second quarter. The company’s consolidated book-to-bill ratio was 120%.

Infrastructure Solutions backlog increased 47% from a year earlier to $382 million. Its implied orders were $282 million, up 43.4% year over year and 38% sequentially. Management expects the segment to enter 2027 with approximately $100 million more backlog than it had entering 2026.

Materials Solutions backlog rose 52.1% year over year to $289 million, though it fell 7.5% from the second quarter. The segment’s implied orders were $140 million, down 37% from a year earlier and 45.3% sequentially after a strong second quarter.

Van der Merwe attributed much of the quarter-to-quarter movement in orders to timing. He said Materials Solutions had almost all of its fourth quarter covered by backlog, with orders extending into 2027.

Segment results and end markets

Infrastructure Solutions sales declined 2.2% to $189 million, while segment operating adjusted EBITDA fell 36% to $15.3 million. Its adjusted EBITDA margin dropped to 8.1%, reflecting timing and mix, including lower asphalt plant invoicing.

Materials Solutions sales increased 4.1% to $163.4 million, but segment operating adjusted EBITDA declined 9.7% to $13.9 million. Its adjusted EBITDA margin was 8.5%, down 130 basis points.

Management cited steady demand for rock crushing and screening equipment and aftermarket support, although macroeconomic headwinds affected capital sales at TSG, which Astec acquired in July 2025. Companywide parts and service sales rose 0.3% to $125.8 million, representing 35.7% of quarterly revenue.

Van der Merwe said data center and industrial projects had generated an estimated $75 million to $100 million in orders. He also noted that the Federal Highway Bill, which expired September 30, had been extended through December 11, reducing near-term uncertainty while lawmakers consider a longer-term framework.

Fourth-quarter outlook and liquidity

For the fourth quarter, Astec expects adjusted EBITDA of approximately $48 million to $58 million, compared with $44.8 million in the same period of 2025. Its full-year outlook also includes capital expenditures of $30 million to $40 million.

CFO Brian Harris said the company ended the third quarter with $63.2 million in cash and $204 million in available credit, for total liquidity of $267.2 million. Operating activities generated $17.4 million in cash during the quarter, and net debt was approximately 2.3 times trailing 12-month adjusted EBITDA, within the company’s target range.

About Astec Industries (NASDAQ:ASTE)

Astec Industries, Inc NASDAQ: ASTE designs, engineers and manufactures equipment used in the construction of roads, bridges and other infrastructure. The company serves businesses involved in the production and processing of aggregates, asphalt, concrete and other construction materials.

Its product portfolio includes asphalt plants and related equipment, concrete production systems, aggregate crushing, screening and material-handling equipment, wood-processing equipment, and machinery used in road construction and rehabilitation.

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