Astec Industries, Inc. ASTE has received an order for the final $122.5 million of a pellet plant order for Highland Pellets along with a related deposit. The company also received the rest of the contracted payment on the first $30 million order.
Astec previously announced receipt of the initial $30 million order in Aug 2015 for Highland Pellets. Per the new contract, the company will build additional equipment for the first production line of this multi-line wood pellet plant facility. Also, it will discuss the details of the entire order in its first-quarter earnings release.
Astec remains optimistic about the opportunity from pellet plants. The Hazlehurst wood pellet plant, line one and line two are running at full capacity, and had met the production target when still in the startup phase. Line three is nearly installed and near the testing phase. The company experienced a slight delay in line three as it remained focused on line two startup. The order for all three lines totaled $60 million.
Astec reported that backlog as of Jan 31, 2016 was a record $348 million, up 11% from the Dec 2015 backlog. This, along with opportunity from pellet plants, robust infrastructure group sales activity and new product development in all groups, especially with concrete plants, will support revenues in 2016.
Astec continues to invest significantly toward increasing its capacity, acquisitions and product manufacturing while upgrading the existing ones. However, weakening of the global mining sector remains a headwind.
Astec currently carries a Zacks Rank #2 (Buy).
Some other favorably ranked stocks in the sector are AptarGroup, Inc. ATR, Ball Corporation BLL and W.W. Grainger, Inc. GWW. All the three stocks hold a Zacks Rank #2.
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