L.B. Foster Company (NASDAQ:FSTR) shares rose nearly 2% in after-hours trading Tuesday after the rail and infrastructure supplier issued upbeat 2026 guidance, even as fourth-quarter earnings fell short of Wall Street expectations.
The company reported adjusted earnings per share of $0.22 for the quarter, well below the analyst consensus of $0.66. Revenue, however, came in stronger than expected at $160.4 million, topping estimates of $157.89 million and rising 25.1% from $128.2 million a year earlier.
The top-line growth was fueled by solid demand in North America, with Rail segment revenue increasing 23.7% and Infrastructure revenue climbing 27.3% year over year.
Looking ahead, L.B. Foster forecast fiscal 2026 revenue between $540 million and $580 million. The midpoint of $560 million sits slightly above the analyst consensus of $552.8 million. The company also projected adjusted EBITDA of $41 million to $46 million and free cash flow in the range of $15 million to $25 million.
Fourth-quarter adjusted EBITDA surged 89% to $13.7 million, compared with $7.2 million in the prior-year period. However, gross margin narrowed 260 basis points to 19.7%, pressured by weaker performance in the U.K. Rail business and restructuring-related costs.
During the quarter, the company recorded $2.2 million in restructuring charges tied to workforce reductions and facility consolidations in its U.K. operations.
“We finished 2025 with extraordinary organic sales growth, robust profitability expansion, and strong cash generation largely in line with our expectations,” said John Kasel, President and CEO. “Our guidance for 2026 reflects a continuation of the favorable momentum we’ve created in the business exiting 2025.”
L.B. Foster generated $22.2 million in operating cash flow in the quarter and used $16.0 million to reduce total debt to $42.8 million. The company’s gross leverage ratio improved to 1.0x from 1.2x a year earlier, strengthening its balance sheet heading into 2026.