Astec Industries, Inc. (ASTE) reported 2Q08 EPS of $0.93, slightly below our estimate of $0.95 but up 12% year-over-year, primarily led by a 22.7% increase in sales attributable to a weak dollar resulting in higher international sales, market acceptance of new products, improved market share, increased sales of recycling equipment and pricing increases.

The company’s commitment to research and development has led to several new product launches and double-digit sales growth. This, in conjunction with strong international sales growth, should drive 2008 EPS growth of 12.3%. While the fundamental story is positive, we reiterate our Hold recommendation on ASTE due to valuation.

Amid a weakening U.S. dollar and the ramp-up of the overseas sales force, we expect international sales to grow in relative importance to its overall business, as the domestic economy decelerates into 2008 and more than offset any potential downturn in domestic spending.

We are forecasting double-digit international