L.B. Foster (FSTR): Buy, Sell, or Hold Post Q3 Earnings?

What Happened?

A number of stocks jumped in the afternoon session after markets rotated out of tech names to position themselves for a massive injection of government spending. 

The sector was ignited by President Trump's call for a $1.5 trillion defense budget for 2027, a significant increase that sent defense contractors surging. Northrop Grumman jumped over 10% and Lockheed Martin gained nearly 8%, acting as the primary engine for the sector's outperformance.Beyond the immediate defense rally, the industrial sector benefited from a broader stabilization in energy costs, with crude prices rebounding. This combination of policy-driven demand and stabilizing input costs made heavy industry an attractive destination.

The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.

Among others, the following stocks were impacted:

• General Industrial Machinery company Albany jumped 5.3%. Is now the time to buy Albany? Access our full analysis report here, it’s free.
• General Industrial Machinery company L.B. Foster jumped 3.3%. Is now the time to buy L.B. Foster? Access our full analysis report here, it’s free.
• General Industrial Machinery company Kadant jumped 5.7%. Is now the time to buy Kadant? Access our full analysis report here, it’s free.
• General Industrial Machinery company Illinois Tool Works jumped 3%. Is now the time to buy Illinois Tool Works? Access our full analysis report here, it’s free.
• General Industrial Machinery company Columbus McKinnon jumped 3.4%. Is now the time to buy Columbus McKinnon? Access our full analysis report here, it’s free.

Zooming In On Kadant (KAI)

Kadant’s shares are somewhat volatile and have had 11 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The previous big move we wrote about was 29 days ago when the stock gained 4.7% on the news that the Federal Reserve lowered its benchmark interest rate by a quarter-percentage point, signaling a more accommodative monetary policy. 

This dovish action, combined with highly accommodating signals from Chair Jerome Powell and the Federal Open Market Committee (FOMC), sent the Dow Jones Industrial Average and S&P 500 surging.The market's bullish reaction was rooted in several key takeaways from the Fed's announcement. Most significantly, the central bank confirmed it would begin expanding its balance sheet by buying short-term bonds, a move that injects critical liquidity and lowers short-term Treasury yields. 

Furthermore, the Fed signaled a shift in priority by removing language that described the labor market as "remaining low," suggesting it would be more focused on supporting economic growth. While the Fed's official forecast projected only one cut for the next year, traders immediately priced in the expectation of more aggressive easing, banking on at least two rate reductions. This widespread anticipation of sustained, low borrowing costs and the virtual certainty that rate hikes would be off the table boosted corporate valuations and created powerful momentum for the equity market rally.

Kadant is up 8.6% since the beginning of the year, but at $310.93 per share, it is still trading 22% below its 52-week high of $398.39 from February 2025. Investors who bought $1,000 worth of Kadant’s shares 5 years ago would now be looking at an investment worth $2,098.

As the Q3 earnings season comes to a close, it’s time to take stock of this quarter’s best and worst performers in the general industrial machinery industry, including L.B. Foster and its peers.

Automation that increases efficiency and connected equipment that collects analyzable data have been trending, creating new demand for general industrial machinery companies. Those who innovate and create digitized solutions can spur sales and speed up replacement cycles, but all general industrial machinery companies are still at the whim of economic cycles. Consumer spending and interest rates, for example, can greatly impact the industrial production that drives demand for these companies’ offerings.

The 15 general industrial machinery stocks we track reported a strong Q3. As a group, revenues beat analysts’ consensus estimates by 2.2% while next quarter’s revenue guidance was in line.

In light of this news, share prices of the companies have held steady as they are up 3.8% on average since the latest earnings results.

L.B. Foster

Founded with a $2,500 loan, L.B. Foster is a provider of products and services for the transportation and energy infrastructure sectors, including rail products, construction materials, and coating solutions.

L.B. Foster reported revenues of $138.3 million, flat year on year. This print fell short of analysts’ expectations by 10.4%. Overall, it was a softer quarter for the company with a significant miss of analysts’ revenue and EBITDA estimates.

John Kasel, President and Chief Executive Officer, commented, "We continued on a favorable trend in the third quarter, although the modest sales growth resulted in lower profitability compared to last year's high point realized in Q3. Sales were up 0.6%, while Adjusted EBITDA was down 7.9% driven primarily by lower margins for Precast Concrete within Infrastructure. Rail margins were also slightly lower, but this was primarily volume-timing related. With the improved customer demand and higher backlog in place, we expect a strong fourth quarter for both segments."

Interestingly, the stock is up 5.3% since reporting and currently trades at $28.86.

Read our full report on L.B. Foster here, it’s free for active Edge members.

Best Q3: Hillenbrand

Hillenbrand, Inc. is an industrial company that designs, manufactures, and sells highly engineered processing equipment and solutions for various industries.

Hillenbrand reported revenues of $652.1 million, down 22.1% year on year, outperforming analysts’ expectations by 9.8%. The business had an incredible quarter with a beat of analysts’ EPS and EBITDA estimates.

The market seems content with the results as the stock is up 1% since reporting. It currently trades at $31.96.

Is now the time to buy Hillenbrand? Access our full analysis of the earnings results here, it’s free for active Edge members.

Weakest Q3: Albany

Founded in 1895, Albany is a global textiles and materials processing company, specializing in machine clothing for paper mills and engineered composite structures for aerospace and other industries.

Albany reported revenues of $261.4 million, down 12.4% year on year, falling short of analysts’ expectations by 12.8%. It was a disappointing quarter as it posted a miss of analysts’ Engineered Composites revenue estimates and a significant miss of analysts’ revenue estimates.

Albany delivered the weakest performance against analyst estimates in the group. As expected, the stock is down 6.2% since the results and currently trades at $51.24.

Read our full analysis of Albany’s results here.

Icahn Enterprises

Founded in 1987, Icahn Enterprises is a diversified holding company primarily engaged in investment and asset management across various sectors.

Icahn Enterprises reported revenues of $2.51 billion, down 9.9% year on year. This number beat analysts’ expectations by 4.3%. Overall, it was an incredible quarter as it also recorded a beat of analysts’ EPS estimates and an impressive beat of analysts’ revenue estimates.

The stock is down 4.6% since reporting and currently trades at $7.75.

Read our full, actionable report on Icahn Enterprises here, it’s free for active Edge members.

Kadant

Headquartered in Massachusetts, Kadant is a global supplier of high-value, critical components and engineered systems used in process industries worldwide.

Kadant reported revenues of $271.6 million, flat year on year. This result topped analysts’ expectations by 4.2%. It was a very strong quarter as it also put up a solid beat of analysts’ EBITDA estimates and an impressive beat of analysts’ adjusted operating income estimates.

The stock is down 3.6% since reporting and currently trades at $288.19.

Read our full, actionable report on Kadant here, it’s free for active Edge members.

As the Q3 earnings season comes to a close, it’s time to take stock of this quarter’s best and worst performers in the general industrial machinery industry, including Albany and its peers.

Automation that increases efficiency and connected equipment that collects analyzable data have been trending, creating new demand for general industrial machinery companies. Those who innovate and create digitized solutions can spur sales and speed up replacement cycles, but all general industrial machinery companies are still at the whim of economic cycles. Consumer spending and interest rates, for example, can greatly impact the industrial production that drives demand for these companies’ offerings.

The 14 general industrial machinery stocks we track reported a strong Q3. As a group, revenues beat analysts’ consensus estimates by 1.2% while next quarter’s revenue guidance was in line.

In light of this news, share prices of the companies have held steady. On average, they are relatively unchanged since the latest earnings results.

Weakest Q3: Albany

Founded in 1895, Albany is a global textiles and materials processing company, specializing in machine clothing for paper mills and engineered composite structures for aerospace and other industries.

Albany reported revenues of $261.4 million, down 12.4% year on year. This print fell short of analysts’ expectations by 12.8%. Overall, it was a disappointing quarter for the company with a miss of analysts’ Engineered Composites revenue estimates and a significant miss of analysts’ revenue estimates.

Gunnar Kleveland, Albany International’s President and Chief Executive Officer said, “As announced last week, we are continuing the transformation of Albany International and have initiated a strategic review of our structures assembly business and its associated production site in Salt Lake City, including a potential sale of all or part of the site. Alongside this effort we took decisive action to de-risk our program assumptions which marks an important first step in resolving the issue. While some near-term uncertainty remains, our remaining Aerospace portfolio is becoming more strategically aligned with our priorities to secure growth and new business where we have a distinct competitive advantage that leverages our differentiated advanced technologies and delivers greater returns.”

Albany delivered the weakest performance against analyst estimates and slowest revenue growth of the whole group. Unsurprisingly, the stock is down 16.9% since reporting and currently trades at $45.35.

Read our full report on Albany here, it’s free for active Edge members.

Best Q3: Icahn Enterprises

Founded in 1987, Icahn Enterprises is a diversified holding company primarily engaged in investment and asset management across various sectors.

Icahn Enterprises reported revenues of $2.51 billion, down 9.9% year on year, outperforming analysts’ expectations by 4.3%. The business had an incredible quarter with a beat of analysts’ EPS and revenue estimates.

The market seems happy with the results as the stock is up 9.5% since reporting. It currently trades at $8.89.

Is now the time to buy Icahn Enterprises? Access our full analysis of the earnings results here, it’s free for active Edge members.

L.B. Foster

Founded with a $2,500 loan, L.B. Foster is a provider of products and services for the transportation and energy infrastructure sectors, including rail products, construction materials, and coating solutions.

L.B. Foster reported revenues of $138.3 million, flat year on year, falling short of analysts’ expectations by 10.4%. It was a softer quarter as it posted a significant miss of analysts’ revenue and EBITDA estimates.

As expected, the stock is down 2.9% since the results and currently trades at $26.72.

Read our full analysis of L.B. Foster’s results here.

Columbus McKinnon

With 19 different brands across the globe, Columbus McKinnon offers material handling equipment for the construction, manufacturing, and transportation industries.

Columbus McKinnon reported revenues of $261 million, up 7.7% year on year. This result topped analysts’ expectations by 8.5%. Overall, it was a stunning quarter as it also produced an impressive beat of analysts’ EBITDA estimates and a solid beat of analysts’ revenue estimates.

The stock is up 2.1% since reporting and currently trades at $15.41.

Read our full, actionable report on Columbus McKinnon here, it’s free for active Edge members.

Kadant

Headquartered in Massachusetts, Kadant is a global supplier of high-value, critical components and engineered systems used in process industries worldwide.

Kadant reported revenues of $271.6 million, flat year on year. This print surpassed analysts’ expectations by 4.2%. It was a very strong quarter as it also logged a solid beat of analysts’ EBITDA estimates and an impressive beat of analysts’ adjusted operating income estimates.

Kadant had the weakest full-year guidance update among its peers. The stock is down 12.1% since reporting and currently trades at $262.10.

Read our full, actionable report on Kadant here, it’s free for active Edge members.

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 2024, a quarter in November) have propped up markets, 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.

L.B. Foster’s third quarter results were met with a negative market reaction as the company’s revenue and profit both came in below Wall Street’s expectations. Management attributed the flat sales largely to timing-related deferrals in its Rail segment, with CEO John Kasel pointing to “continued planned downsizing of our U.K. business and timing of rail distribution sales.” While Infrastructure sales grew, Rail revenues declined, and higher production costs weighed on profitability. The company did highlight strong operating cash flow and an 18% increase in backlog, but overall, management acknowledged that some anticipated revenue was pushed into future periods.

Is now the time to buy FSTR? Find out in our full research report (it’s free for active Edge members).

L.B. Foster (FSTR) Q3 CY2025 Highlights:

• Revenue: $138.3 million vs analyst estimates of $154.4 million (flat year on year, 10.4% miss)
• EPS (GAAP): $0.40 vs analyst expectations of $0.62 (35% miss)
• Adjusted EBITDA: $11.36 million vs analyst estimates of $14.55 million (8.2% margin, 21.9% miss)
• The company dropped its revenue guidance for the full year to $540 million at the midpoint from $545 million, a 0.9% decrease
• EBITDA guidance for the full year is $41 million at the midpoint, in line with analyst expectations
• Operating Margin: 6%, in line with the same quarter last year
• Backlog: $247.4 million at quarter end, up 18.4% year on year
• Market Capitalization: $281.7 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 Q3 Earnings Call

• Julio Romero (Sidoti & Company, LLC) asked about the company’s ability to meet fourth quarter sales and EBITDA guidance given the ongoing government shutdown. CEO John Kasel stated that funding was “flowing” and backlog was sufficient to deliver expected results, but acknowledged risks if disruptions persist.
• Julio Romero (Sidoti & Company, LLC) inquired about the sustainability of total track monitoring sales growth. Kasel credited strong customer adoption of new monitoring products and indicated confidence in continued demand for these solutions.
• Liam Burke (B. Riley Securities, Inc.) questioned the impact of product mix and U.K. operations on profit margins within Rail. CFO William Thalman explained that while friction management provided some margin lift, overall profitability was offset by weakness in the U.K. business.
• Liam Burke (B. Riley Securities, Inc.) also probed the outlook for precast acquisitions. Kasel confirmed active pursuit of tuck-in opportunities, particularly in the southern U.S., but emphasized a current focus on ramping up organic volumes in new facilities.
• Unknown Analyst (GAMCO) pressed for details on the rationale behind lowering full-year guidance. Kasel attributed the change to realistic assessments of delivery capacity, rather than a lack of demand, and said any undelivered backlog will likely benefit early 2026.

Catalysts in Upcoming Quarters

In the coming quarters, the StockStory team will be monitoring (1) the conversion of backlog into revenue, especially in the Rail segment, (2) the pace of margin recovery as cost controls and improved mix take hold, and (3) progress in ramping up new precast and steel facilities. Additionally, sustained strength in rail monitoring and safety technologies, as well as the impact of government infrastructure funding, will be important performance indicators.

L.B. Foster currently trades at $27.10, down from $27.52 just before the earnings. Is there an opportunity in the stock?Find out in our full research report (it’s free for active Edge members).

Our Favorite Stocks Right Now

Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.

The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check out our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).

Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% five-year return).

StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.

What Happened?

A number of stocks fell in the morning session after markets became increasingly wary of high valuations following a significant AI-driven rally. 

The tech-heavy Nasdaq fell approximately 1.4% as a wave of caution swept through the market. A key example of this trend is Palantir Technologies, which saw its shares drop around 7% despite reporting record quarterly results that surpassed analyst estimates and raising its full-year revenue outlook. This seemingly contradictory movement highlighted a broader sentiment shift. Investors appeared to be engaging in profit-taking, concerned that the recent surge in AI-related stocks had led to stretched valuations. This broader market caution affected high-growth technology companies that had previously surged on AI optimism but faced increased scrutiny, signaling a potential cooling-off period for the sector. 

Adding serious weight to this caution, leadership at both Goldman Sachs and Morgan Stanley highlighted the possibility of a correction in the equity markets over the next couple of years.Despite the euphoria driven by AI optimism and the promise of future rate cuts, these banks viewed this cooling-off period not as a disaster, but as a necessary and healthy feature of a long-term bull market.

The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.

Among others, the following stocks were impacted:

• Electronic Components company Novanta fell 5.2%. Is now the time to buy Novanta? Access our full analysis report here, it’s free for active Edge members.
• HVAC and Water Systems company Northwest Pipe fell 4%. Is now the time to buy Northwest Pipe? Access our full analysis report here, it’s free for active Edge members.
• Professional Tools and Equipment company Hillman fell 4.4%. Is now the time to buy Hillman? Access our full analysis report here, it’s free for active Edge members.
• Renewable Energy company ChargePoint fell 4.9%. Is now the time to buy ChargePoint? Access our full analysis report here, it’s free for active Edge members.
• General Industrial Machinery company L.B. Foster fell 3.3%. Is now the time to buy L.B. Foster? Access our full analysis report here, it’s free for active Edge members.

Zooming In On Novanta (NOVT)

Novanta’s shares are quite volatile and have had 16 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The previous big move we wrote about was 11 days ago when the stock gained 8% on the news that an analyst at William Blair gave the company a Buy rating. The analyst, Brian Drab, was noted for having a positive track record in the Industrial Goods sector, adding weight to the positive outlook.

Novanta is down 14.6% since the beginning of the year, and at $128.88 per share, it is trading 29.4% below its 52-week high of $182.65 from November 2024. Investors who bought $1,000 worth of Novanta’s shares 5 years ago would now be looking at an investment worth $1,122.

P.S. In tech investing, "Gorillas" are the rare companies that dominate their markets—like Microsoft and Apple did decades ago. Today, the next Gorilla is emerging in AI-powered enterprise software. Access the ticker here in our special report.