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Manitowoc (MTW) Q3 Earnings Beat on Solid Margin Expansion

The Manitowoc Company, Inc. MTW delivered third-quarter 2019 adjusted earnings per share of 54 cents, beating the Zacks Consensus Estimate of 33 cents by a wide margin. The company had reported earnings per share of 20 cents in the prior-year quarter. The company delivered solid quarterly results driven by continued operational improvements and margin expansion.
 
Including special items, the company reported earnings per share of 51 cents in the quarter compared with the 32 cents per share recorded in the prior-year quarter.

Manitowoc’s revenues edged down to $448 million from the prior-year quarter’s $450 million. Also, the top-line figure missed the Zacks Consensus Estimate of $450 million. 

The Manitowoc Company, Inc. Price, Consensus and EPS Surprise

The Manitowoc Company, Inc. Price, Consensus and EPS Surprise

The Manitowoc Company, Inc. price-consensus-eps-surprise-chart | The Manitowoc Company, Inc. Quote

Operational Update

Cost of sales declined 2.8% year over year to $359.6 million in the July-September quarter. Gross profit was up 10.5% year over year to $88.4 million. Gross margin came in at 19.7% compared with the 17.8% reported in the comparable period last year.

Engineering, selling and administrative expenses slipped 11.7% year over year to $54.8 million. Adjusted EBITDA was $42.8 million in the quarter compared with the $30.5 million witnessed in the prior-year quarter. Continued improvements throughout the business were key drivers for this year-over-year upswing.

Adjusted operating income surged 58.1% year over year to $34 million in the quarter. Operating margin came in at 7.6% compared with the 4.7% recorded in the comparable period last year.
 
Financial Updates

Manitowoc reported cash and cash equivalents of $67.5 million at the end of the third quarter, down from the $140 million recorded as of Dec 31, 2018. Long-term debt was $309.1 million as of Sep 30, 2019, compared with $266.7 million as of Dec 31, 2018.

Manitowoc generated $37.6 million of cash from operating activities during the three-month period ended Sep 30, 2019, compared with cash usage of $152.2 million recorded in the year-ago period.

2019 Guidance

Manitowoc has updated its 2019 revenue guidance to $1.85-$1.88 billion and EBITDA guidance to $145-$160 million. The company projects capital expenditures of $35 million for the current year.

Zacks Rank & Other Key Picks

Manitowoc currently carries a Zacks Rank #2 (Buy).

A few other top-ranked stocks in the Industrial Products sector are Sharps Compliance Corp SMED, Tennant Company TNC and Casella Waste Systems, Inc. CWST. While Sharps Compliance and Tennant sport a Zacks Rank #1 (Strong Buy), Casella Waste Systems carries a Zacks Rank #2, at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Sharps Compliance has an expected earnings growth rate of a whopping 500% for the current year. The stock has appreciated 14.1% in a year’s time.

Tennant has a projected earnings growth rate of 29.82% for 2019. The company’s shares have rallied 23.3% over the past year.

Casella Waste Systems has an estimated earnings growth rate of 37.7% for the ongoing year. The company’s shares have gained 30.3% in the past year.

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