Manitowoc Company, Inc
) reported adjusted earnings from continuing operations of 17
cents per share, a year-over-year increase of 55% aided by sound
performance in the Foodservice segment and new product
introductions. The bottom line, however, fell short of the Zacks
Consensus Estimate of 22 cents.
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Including restructuring costs and other items, earnings from
continuing operations was 1 cent per share in the quarter
compared with 10 cents in the year-ago quarter. Including
discontinuing operations, Manitowoc reported a loss per share of
6 cents as against earnings of 8 cents in the prior-year quarter.
Total revenue was $850 million in the reported quarter, down 5%
year over year as a decline in the Crane segment sales offset the
increase in Foodservice sales. Revenues missed the Zacks
Consensus Estimate of $920 million by a wide margin.
Cost of sales decreased 7% to $623 million in the reported
quarter from $672 million in the year-ago quarter. Gross profit
improved 2% year over year to $227 million. Consequently, gross
margin expanded 190 basis points (bps) to 26.7%.
Engineering, selling and administrative expenses increased 4%
year over year to $162.7 million. Adjusted operating income was
$55.6 million, down 1.6% year over year, leading to 20-bps
contraction in operating margin to 6.5%.
Revenues from the Crane and Related Products segment decreased
14% year over year to $467 million in the reported quarter due to
a lower backlog level at the beginning of the year along with
some customer-related project delays. However, increased activity
in the Americas region and ongoing growth with tower cranes in
the Middle East were a minor offset. The segment's operating
income plunged 35% year over year to $22.6 million due to lower
sales volume, partially offset by improved operational
The Foodservice Equipment segment's revenues were up 9% year over
year to $383 million in the quarter from $351 million in the
prior-year quarter. The improvement was mainly backed by
continued growth in the Americas and Europe, the Middle East and
Africa (EMEA) regions, as well as sales from new product
rollouts. The segment's operating income also improved 18% year
over year to $58 million. The year-over-year increase was driven
by new products and the benefits realized from ongoing
Backlog in the Crane segment was $842 million at the end of the
first quarter of 2014, up 47% sequentially. Total orders were
$733 million, up 29% from the prior-year quarter. This includes
all confirmed orders that were placed at the ConExpo trade show.
Approximately 26% of this backlog will be delivered in 2015 or
As of Mar 31, 2014, cash and temporary investments amounted to
$78.8 million versus $54.9 million as of Dec 31, 2013. Long-term
debt was $1.8 billion as of Mar 31, 2014, compared with $1.5
billion as of Dec 31, 2013. Debt-to-capitalization ratio was high
at 69.9% as of Mar 31, 2014, up from 66.1% as of Dec 31, 2013.
Cash used in continuing operating activities was $264.6 million
in the quarter compared with $102.9 million in the prior-year
quarter driven by working capital requirements in both segments.
Capital expenditure was $17 million compared with $21 million in
the year-ago quarter.
For 2014, Manitowoc reiterated its expectation of modest top-line
growth for Crane segment revenues. Foodservice revenues are
anticipated to rise in mid-single digits. The company forecasts
high-single-digit improvement in operating margins in the Crane
segment and high-teens gain in the Foodservice segment.
Capital expenditure is expected at $90 million for the year.
Manitowoc also predicts depreciation and amortization of $120
million for 2014. Interest expenses are predicted at $100
Manitowoc will be benefited from the momentum in the Foodservice
segment driven by new product introductions and the continued
execution of its strategic initiatives. The Cranes segment's
revenues will grow, aided by the successful ConExpo trade show in
March. Manitowoc remains optimistic regarding its new products,
which include an array of technologically advanced products that
have received positive response at the premier construction
equipment trade show. Furthermore, improvement in the
construction sector will boost the segment's revenues.
However, on the flipside, the premature termination of the joint
venture agreement between Manitowoc and Shantui has dealt a blow
to Manitowoc as it could have strengthened its presence in
China's mobile crane market. Furthermore, Manitowoc faces rising
competition from a number of crane manufacturers in the Chinese
market including Zoomlion, Sany and Fushun Excavator. These
cranes, being priced at higher discounts, pose a threat to
Manitowoc's market share.
Wisconsin-based Manitowoc is one of the world's leading
innovators and manufacturers of commercial foodservice equipment.
The company is one of the premier innovators and providers of
crawler cranes, tower cranes and mobile cranes for the heavy
construction industry. These are complemented by industry-leading
product support services.
Manitowoc currently retains a Zacks Rank #4 (Sell). A
better-ranked stock in the same sector is
) with a Zacks Rank #1 (Strong Buy).
Among Manitowoc's peers,
Astec Industries Inc.
) reported first-quarter 2014 earnings per share of 41 cents, a
28% year-over-year decline from 57 cents in the year-earlier
quarter and also short of the Zacks Consensus Estimate of 57
) reported first-quarter 2014 adjusted earnings of 28 cents per
share, up 27% year over year from 22 cents in the year-ago
quarter, falling way short of the Zacks Consensus Estimate of 34