L.B. Foster’s first quarter results were met with a negative market reaction, reflecting concerns over a sharp revenue decline and earnings shortfall relative to Wall Street expectations. Management attributed the underperformance to a significant slowdown in its Rail segment, which faced both a tough prior-year comparison and delayed government funding for rail projects. CEO John Kasel described the quarter’s outcome as “softer than last year,” noting that infrastructure sales provided some offset, particularly through strong demand in Precast Concrete. Management acknowledged the unusual lumpiness in rail distribution and pointed to delayed order timing as a key factor. The company emphasized that first quarter results are typically weaker due to seasonality.
Is now the time to buy FSTR? Find out in our full research report (it’s free).
L.B. Foster (FSTR) Q1 CY2025 Highlights:
- Revenue: $97.79 million vs analyst estimates of $114.4 million (21.3% year-on-year decline, 14.5% miss)
- EPS (GAAP): -$0.20 vs analyst estimates of $0.01 (significant miss)
- Adjusted EBITDA: $1.82 million vs analyst estimates of $4.55 million (1.9% margin, 59.9% miss)
- The company reconfirmed its revenue guidance for the full year of $560 million at the midpoint
- EBITDA guidance for the full year is $45 million at the midpoint, above analyst estimates of $41.88 million
- Operating Margin: -2%, down from 1.7% in the same quarter last year
- Backlog: $237.2 million at quarter end
- Market Capitalization: $224 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 L.B. Foster’s Q1 Earnings Call
- Julio Romero (Sidoti): Asked about the outlook for Rail Products volumes in Q2 and whether the segment would remain down year-over-year. CEO John Kasel responded that management expects a significant rebound in Q2 and Q3, citing improved orders and backlog.
- Julio Romero (Sidoti): Inquired about the composition of backlog growth in Rail. CFO Bill Thalman detailed that Rail Products and Friction Management backlogs grew, while UK operations declined, improving profitability mix.
- Julio Romero (Sidoti): Questioned what is driving growth in the Friction Management business. Kasel credited new customers, geographic expansion, and a strong service team for momentum in this segment.
- Unidentified Analyst: Asked about capital expenditures by rail customers during periods of lower traffic. Kasel said that rail customers are indeed increasing maintenance and capital work, which is reflected in order growth.
- Christopher Sakai (Singular Research): Sought updates on new orders and drivers in Infrastructure. Kasel highlighted Precast Concrete’s strength, geographic expansion, and continued demand from government programs as key factors.
Catalysts in Upcoming Quarters
In upcoming quarters, the StockStory team will be monitoring (1) the pace of backlog conversion into sales in both Rail and Infrastructure segments, (2) the status and execution of government infrastructure funding that underpins much of L.B. Foster’s recovery expectations, and (3) the company’s ability to manage cost pressures from tariffs and supply chain volatility. The effectiveness of organic growth investments and new product rollouts will also be important indicators for sustained margin improvement.
L.B. Foster currently trades at $21.80, up from $20.42 just before the earnings. Is the company at an inflection point that warrants a buy or sell? Find out in our full research report (it’s free).
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