L.B. Foster (FSTR) Misses Q2 EPS by 30c
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L.B. Foster (NASDAQ: FSTR) reported Q2 EPS of ($0.11), $0.30 worse than the analyst estimate of $0.19. Revenue for the quarter came in at $136 million versus the consensus estimate of $152.65 million.
Robert P. Bauer, L.B. Foster Company’s President and Chief Executive Officer, commented, “In response to weak energy and rail markets, we have been working diligently to reduce costs through the first half of this year, continuously examining ways to maximize cash flow and restore profitability. Our gross profit margins have held up very well as several actions we’ve taken improved operational efficiency. Certain investments we made over the last two years have improved productivity in several factories that have enabled gross profit margins to remain strong despite lower volume. During the first half of 2016, we have taken actions to reduce our salaried workforce costs that will produce $6 million of annualized savings. In addition, discretionary spending cuts will result in $1 million of annual savings. We have already identified additional actions to reduce expenses further in 2017.
“During the quarter, we also divested our rail car repair fixtures division, eliminating a business that was not strategic and was not accretive to results. We are continuing to evaluate other operating units that are not earning acceptable returns on capital.”
Mr. Bauer concluded by saying, “60% of our business activity has been adversely impacted by freight rail and energy market weakness. When business conditions improve in those sectors, the cost actions we have taken will leave us better positioned to capitalize on the recovery. Our businesses which comprise the other 40% of sales continue to perform well and are positioned to win more business.”
For earnings history and earnings-related data on L.B. Foster (FSTR) click here.
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