Investors Can Find Comfort In Astec Industries' (NASDAQ:ASTE) Earnings Quality

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06-05-2025

The market was pleased with the recent earnings report from Astec Industries, Inc. (NASDAQ:ASTE), despite the profit numbers being soft. We think that investors might be looking at some positive factors beyond the earnings numbers.
We've discovered 2 warning signs about Astec Industries. View them for free.
NasdaqGS:ASTE Earnings and Revenue History May 6th 2025
How Do Unusual Items Influence Profit?
Importantly, our data indicates that Astec Industries' profit was reduced by US$65m, due to unusual items, over the last year. While deductions due to unusual items are disappointing in the first instance, there is a silver lining. We looked at thousands of listed companies and found that unusual items are very often one-off in nature. And, after all, that's exactly what the accounting terminology implies. Astec Industries took a rather significant hit from unusual items in the year to March 2025. All else being equal, this would likely have the effect of making the statutory profit look worse than its underlying earnings power.
That might leave you wondering what analysts are forecasting in terms of future profitability. Luckily, you can click here to see an interactive graph depicting future profitability, based on their estimates.
Our Take On Astec Industries' Profit Performance
As we discussed above, we think the significant unusual expense will make Astec Industries' statutory profit lower than it would otherwise have been. Based on this observation, we consider it possible that Astec Industries' statutory profit actually understates its earnings potential! And on top of that, its earnings per share have grown at 33% per year over the last three years. The goal of this article has been to assess how well we can rely on the statutory earnings to reflect the company's potential, but there is plenty more to consider. So while earnings quality is important, it's equally important to consider the risks facing Astec Industries at this point in time. Case in point: We've spotted 2 warning signs for Astec Industries you should be aware of.
This note has only looked at a single factor that sheds light on the nature of Astec Industries' profit. But there is always more to discover if you are capable of focussing your mind on minutiae. Some people consider a high return on equity to be a good sign of a quality business. While it might take a little research on your behalf, you may find this free collection of companies boasting high return on equity, or this list of stocks with significant insider holdings to be useful.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.