Insteel Industries (IIIN) Gains Sharply Following Earnings

Insteel Industries (NASDAQ: IIIN) is notably stronger Thursday (+14.5%) following earnings before the bell, despite missing the consensus.

Net earnings for the first quarter of fiscal 2016 increased to $6.7 million, or $0.36 per share from $4.2 million, or $0.22 per diluted share in the same period a year ago. Net sales decreased 16.5% to $92.4 million from $110.6 million in the prior year period on a 9.0% decrease in shipments and an 8.3% decrease in average selling prices.

Insteel's first-quarter results were favorably impacted by higher spreads between selling prices and raw material costs relative to the prior year quarter, which were partially offset by the decrease in shipments.

On its outlook the CEO said:

"As we move into the second fiscal quarter, we expect that our results will be affected by the usual seasonal slowdown in construction activity in most of our markets related to winter weather conditions. Looking ahead to the remainder of fiscal 2016, we anticipate improved demand for our concrete reinforcing products driven by the gradual recovery in nonresidential construction. We also expect to benefit from the recent passage of a five-year federal highway spending bill, which provides a higher degree of funding certainty for states and municipalities that should translate into increased infrastructure construction in the coming years."

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