Winners And Losers Of Q3: Astec (NASDAQ:ASTE) Vs The Rest Of The Construction Machinery Stocks

December 02, 2024 at 05:28 AM EST

ASTE Cover Image

The end of the earnings season is always a good time to take a step back and see who shined (and who not so much). Let’s take a look at how construction machinery stocks fared in Q3, starting with Astec (NASDAQ: ASTE).

Automation that increases efficiencies and connected equipment that collects analyzable data have been trending, creating new sales opportunities for construction machinery companies. On the other hand, construction machinery companies are at the whim of economic cycles. Interest rates, for example, can greatly impact the commercial and residential construction that drives demand for these companies’ offerings.

The 4 construction machinery stocks we track reported a slower Q3. As a group, revenues were in line with analysts’ consensus estimates.

Thankfully, share prices of the companies have been resilient as they are up 5.1% on average since the latest earnings results.

Astec (NASDAQ: ASTE)

Inventing the first ever double-barrel hot-mix asphalt plant, Astec (NASDAQ: ASTE) provides machines and equipment for building roads, processing raw materials, and producing concrete.

Astec reported revenues of $291.4 million, down 3.9% year on year. This print fell short of analysts’ expectations by 6.9%. Overall, it was a slower quarter for the company with some shareholders anticipating a better outcome.

"In the third quarter, we had mixed results. In Infrastructure Solutions, both sales and margins were up for the quarter, while in Materials Solutions, we continued to face difficult market conditions. We made nice progress improving our cash flow in the third quarter, which continues to be a key focal point. We were also able to settle one of our previously disclosed, long-standing, legacy litigation matters related to a product we no longer own, which resulted in an $8.4 million charge in the third quarter," said Jaco van der Merwe, Chief Executive Officer.

Astec delivered the weakest performance against analyst estimates of the whole group. Interestingly, the stock is up 11.4% since reporting and currently trades at $37.12.

Read our full report on Astec here, it’s free.

Best Q3: Terex (NYSE: TEX)

With humble beginnings as a dump truck company, Terex (NYSE: TEX) today manufactures lifting and material handling equipment designed to move and hoist heavy goods and materials.

Terex reported revenues of $1.21 billion, down 6.1% year on year, outperforming analysts’ expectations by 4.2%. The business had an exceptional quarter with a solid beat of analysts’ organic revenue estimates and an impressive beat of analysts’ adjusted operating income estimates.

Terex pulled off the biggest analyst estimates beat among its peers. However, the results were likely priced into the stock as it’s traded sideways since reporting. Shares currently sit at $54.79.

Is now the time to buy Terex? Access our full analysis of the earnings results here, it’s free.

Weakest Q3: Manitowoc (NYSE: MTW)

Contracted by the United States Navy during WWII, Manitowoc (NYSE: MTW) provides cranes and lifting equipment.

Manitowoc reported revenues of $524.8 million, flat year on year, exceeding analysts’ expectations by 1.6%. Still, it was a disappointing quarter as it posted a significant miss of analysts’ adjusted operating income estimates.

Interestingly, the stock is up 2.8% since the results and currently trades at $10.67.

Read our full analysis of Manitowoc’s results here.

Caterpillar (NYSE: CAT)

With its iconic yellow machinery working on construction sites, Caterpillar (NYSE: CAT) manufactures construction equipment like bulldozers, excavators, and parts and maintenance services.

Caterpillar reported revenues of $16.11 billion, down 4.2% year on year. This result lagged analysts' expectations by 0.8%. It was a softer quarter as it also logged a miss of analysts’ EBITDA estimates.

The stock is up 5.4% since reporting and currently trades at $408.64.

Read our full, actionable report on Caterpillar here, it’s free.

Market Update

Thanks to the Fed’s rate hikes in 2022 and 2023, inflation has been on a steady path downward, easing back toward that 2% sweet spot. Fortunately (miraculously to some), all this tightening didn’t send the economy tumbling into a recession, so here we are, cautiously celebrating a soft landing. The cherry on top? Recent rate cuts (half a point in September, a quarter in November) have kept 2024 stock markets frothy, especially after Trump’s November win lit a fire under major indices and sent them to all-time highs. However, there's still plenty to ponder — tariffs, corporate tax cuts, and what 2025 might hold for the economy.

Want to invest in winners with rock-solid fundamentals? Check out our Strong Momentum Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.

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