Manitowoc (MTW) Cuts Operations in Russia, Halts Crane Orders

The Manitowoc Company, Inc. MTW has been reducing its operations in Russia since the onset of the Russia-Ukraine war and the consequent escalating conflict in the region.

Manitowoc has stopped taking new crane orders from Russia, where it has 20 local employees. Sales to Russia contributed less than 2% to total sales of $1.72 billion in 2021. This production curtailment will likely have no impact on the company’s sales performance. The leading provider of engineered lifting solutions is constantly supporting its local team members and conducting business, adhering to all sanctions and applicable laws.

Manitowoc has been witnessing improvement in order levels and backlog over the last four quarters. Total orders in 2021 increased 43% year over year to $2,167 million. The upside can be primarily attributed to higher global demand. Strong demand as well as contributions from the recent acquisitions will boost the top line in 2022. For fiscal 2022, MTW expects revenues between $2 and $2.2 billion. The mid-point of the range indicates year-over-year growth of 22%. Adjusted earnings per share are expected between 65 cents and $1.35, which suggests 16% year-over-year growth at the midpoint.

Manitowoc is focused on improving aftermarket business through higher-margin parts and services. To support this growth, the company acquired the crane business of H&E Equipment Services, Inc. HEES last year. The buyout expanded Manitowoc’s ability to provide rentals, new sales, used sales, aftermarket parts and services to various end-market customers. H&E’s crane business operates with 11 full-service branch locations. The purchase of H&E’s crane business is an important step in its journey to grow the less cyclical part of its business.

Manitowoc is ramping up its China tower crane business and launched six new crane models, which have received positive customer feedback. China is the largest tower crane market in the world. The company invested $15 million in its tower crane rental fleet in Europe, which helped it gain market share in Germany and win some strategic orders with key accounts. In all-terrain cranes, the company has the latest models lined up for launch at Bauma, the world's leading construction machinery trade fair in 2022. These strategic initiatives will help drive substantial long-term growth.

Since the invasion of Ukraine started, various companies have pulled their business out of Russia following strict western sanctions against the country. Among other industrial companies, a major agricultural equipment manufacturer, Deere & Company DE, halted shipments to Russia and Belarus. Deere has had a presence in Russia since 1973 with a manufacturing and parts distribution facility in the south of Moscow. DE currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Construction and mining equipment manufacturing giant Caterpillar Inc. CAT decided to suspend operations in its manufacturing facilities in Russia. The company stated that operations in Russia have become increasingly challenging, including supply chain disruptions and sanctions. Caterpillar Foundation is donating more than $1 million to support the urgent and long-term needs of the Ukraine humanitarian crisis. Caterpillar currently carries a Zacks Rank #3 (Hold).

Price Performance

In the past year, Manitowoc’s shares have declined 29.8% compared with the industry’s loss of 7.3%.

Image Source: Zacks Investment Research

Manitowoc currently carries a Zacks Rank #3.

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