L.B. Foster’s second quarter results landed in line with Wall Street’s revenue expectations, while profitability came in below consensus. Management attributed the quarter’s performance to a robust recovery in the Infrastructure segment, especially in Precast Concrete, which grew significantly year over year. CEO John Kasel highlighted that Friction Management within Rail saw its strongest month, even as overall Rail revenue declined. The company also benefited from ongoing SG&A cost reductions and improved backlog, though some softness persisted in its U.K. rail operations.
Is now the time to buy FSTR? Find out in our full research report (it’s free).
L.B. Foster (FSTR) Q2 CY2025 Highlights:
- Revenue: $143.6 million vs analyst estimates of $144.2 million (2% year-on-year growth, in line)
- EPS (GAAP): $0.27 vs analyst expectations of $0.52 (47.6% miss)
- Adjusted EBITDA: $12.23 million vs analyst estimates of $11.69 million (8.5% margin, 4.7% beat)
- The company dropped its revenue guidance for the full year to $545 million at the midpoint from $560 million, a 2.7% decrease
- EBITDA guidance for the full year is $42 million at the midpoint, above analyst estimates of $40.3 million
- Operating Margin: 6.3%, up from 3.2% in the same quarter last year
- Backlog: $269.9 million at quarter end
- Market Capitalization: $239.1 million
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From L.B. Foster’s Q2 Earnings Call
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Liam Dalton Burke (B. Riley Securities) questioned the allocation of capital between organic growth, acquisitions, and share repurchases. CEO John Kasel explained that recent capital was directed primarily to organic initiatives like Precast expansion, with share buybacks and selective acquisitions also ongoing.
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Liam Dalton Burke (B. Riley Securities) asked about the sustainability of backlog strength in both Precast and Friction Management. Kasel responded that both areas are seeing robust demand, with government funding and customer activity supporting continued growth through year-end.
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Julio Alberto Romero (Sidoti & Company) sought clarification on U.K. Rail exposure after the exit from Automation and Material Handling. Kasel confirmed the U.K. business is being resized, with limited remaining exposure and ongoing focus on higher-return activities.
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Julio Alberto Romero (Sidoti & Company) inquired about the implied sales growth split between Infrastructure and Rail for the second half. Kasel said Infrastructure will continue to lead, but a Rail rebound is expected as federal project funds are released and backlog is executed.
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John H. Bair (Ascend Wealth Advisors) pressed on the future tax rate impact from the U.K. restructuring. CFO William Thalman indicated the effective tax rate should decline as the U.K. business improves, with minimal global cash tax outflows expected moving forward.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will track (1) execution on the sizable Infrastructure and Rail backlogs, (2) the pace of Precast Concrete adoption from the new Florida facility and Envirocast product line, and (3) the impact of ongoing cost discipline on profitability. We are also monitoring the trajectory of U.K. restructuring efforts and the company’s ability to secure new federal project funding, both of which could materially affect results.
L.B. Foster currently trades at $22.56, up from $22.08 just before the earnings. Is there an opportunity in the stock?Find out in our full research report (it’s free).
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