L.B. Foster (NASDAQ: FSTR) reported Q2 EPS of $0.52, $0.45 worse than the analyst estimate of $0.97. Revenue for the quarter came in at $171.4 million versus the consensus estimate of $209.32 million.

Robert P. Bauer, L.B. Foster Company’s President and Chief Executive Officer, commented, “Our results for the quarter reflect the significant acquisition activity the company has engaged in during the fourth quarter of 2014 and first quarter of 2015, including the impact from interest, amortization, transaction and integration costs associated with recently closing three significant acquisitions. In addition, our legacy businesses delivered mixed results with some meeting or exceeding our expectations and others being affected by market weakness and pressure on steel prices. The acquisitions serving the energy markets were not accretive to EPS in the quarter, and we are not forecasting any improvement for the balance of 2015. This is having a dilutive impact on our earnings and will likely continue at the forecasted operating levels for the next two quarters. Despite the difficult environment, both IOS and Chemtec Energy Services continue to be well positioned to serve customers with exploration, production and midstream applications requiring tubular services and critical measurement systems.

"Our construction and tubular businesses reported sales increases in both the quarter and on a year-to-date basis. Our Piling and Precast Building divisions, including Carr concrete products, have been the driving force behind a 21% year-over-year increase in sales for the Construction segment through six months. Tubular and Energy Services sales increases were driven by the acquisitions and our base Coated Products business is expected to have a solid second half as our production interruptions from the factory upgrades will be behind us.

"Sales for the Rail segment are down for the first half as they cope with fewer projects in the Transit market, pockets of weakness in freight rail, a weaker European business with unfavorable currency impact, and declining sales from Union Pacific Railroad. As previously mentioned; the Company is making adjustments as we remove all Union Pacific sales from our forecasts and have taken charges in the quarter to reflect current conditions. We are also incurring litigation costs for the warranty dispute which are discussed later in the press release.”

Mr. Bauer concluded by saying, “Finally, I remain encouraged by our efforts to drive gross margin improvements. Consolidated gross margins improved in the quarter and in the first half over prior year as we reached 21.9% on a year-to-date basis. As we make investments in systems and continuous improvement programs, we are focused on driving greater efficiency across the Company.”

L.B. Foster sees FY2015 EPS of $2.15 - $2.50, versus the consensus of $3.20. L.B. Foster sees FY2015 revenue of $685 - $725 million, versus the consensus of $765.3 million.

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