Pittsburgh, Pennsylvania-based L.B. Foster Company, a manufacturer, fabricator, and distributor of products and services for rail, construction, energy and utility markets, Friday reported its Q4 2012 operating results which included a 5.2 percent increase in sales compared to Q4 2011 and diluted earnings per share from continuing operations of $0.65.
Q4 net sales of $140.7 million increased by $7 million or 5.2 percent due to a 23.2 percent increase in Rail segment sales and a 48.6 percent improvement in Tubular segment sales, but were partially offset by a 27.8 percent decline in Construction segment sales. Q4 income from continuing operations increased by 14.2 percent to $6.6 million or $0.65 per diluted share compared to income from continuing operations of $5.8 million or $0.57 per diluted share last year.
Rail segment sales increased 23.2 percent driven by strong sales in the rail distribution and transit products businesses. Construction sales declined 27.8 percent in the quarter. This was due principally to the piling product line and, to a lesser extent, the fabricated bridge business. The lower margin was due principally to sales of lower cost inventory in Q4 2011 that resulted in a higher margin. Tubular products closed the year with strong Q4 sales and a backlog in line with the prior year. Gross profit margins expanded slightly on the higher sales volume.
Net sales for 2012 were $588.5 million, an increase of $13.2 million or 2.3 percent, due to a 17.5 percent increase in Rail segment sales and a 50.8 percent improvement in Tubular segment sales, partially offset by a 25.7 percent decline in Construction segment sales. Net income from continuing operations was $14.8 million or $1.44 per diluted share compared to $22.1 million or $2.14 per diluted share in 2011.
L.B. Foster said that it expects 2013 to be a year in which the construction business will turn positive. Following a number of difficult quarters, order trends indicate that an upturn is likely despite continued pressures on government budgets. Rail and tubular markets will grow with end customer demand varying depending on specific company strategies.
The company is also planning to increase spending on capital projects for capacity and new product programs as well as for adding resources for new products and addressing under-served markets.