Yahoo Finance JBT (JBT) Up 5.3% Since Last Earnings Report: Can It Continue?
It has been about a month since the last earnings report for John Bean (JBT). Shares have added about 5.3% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is JBT due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
John Bean Q1 Earnings Surpass Estimates, Increase Y/Y
John Bean reported first-quarter 2024 adjusted earnings from continuing operations of 85 cents per share, up 39% from the year-ago quarter, reflecting cost savings from its supply-chain initiatives and restructuring program. The figure beat the Zacks Consensus Estimate of earnings of 82 cents per share.
On a reported basis, the company’s earnings per share (from continuing operations) were 71 cents, a 34% improvement from the year-ago quarter’s 53 cents.
Revenues of $392 million were up 1% from the year-ago quarter. The top-line missed the Zacks Consensus Estimate of $397 million.
The cost of sales dipped 1.4% year over year to $252 million. Gross profit was up 5.6% year over year to $140 million. The gross margin was 35.8% compared with the year-earlier quarter’s figure of 34.2%.
Selling, general and administrative expenses were up 6.2% year over year to $110 million. Adjusted operating profit increased 13% to $37 million from the year-ago quarter’s $32.6 million. Adjusted operating margin was 9.4%, a 100-basis point expansion from the first quarter of 2023.
Adjusted EBITDA was around $57 million, reflecting a year-over-year increase of 6%. Adjusted EBITDA margin was 14.6% compared with the year-ago quarter’s 14%.
The company completed its restructuring program in the quarter, thus incurring an expense of $1 million. Its cumulative expense runs to approximately $18 million. John Bean Technologies has realized approximately $4 million in restructuring savings during the quarter and is on track to achieve cumulative annual run-rate cost savings of approximately $18 million.
JBT’s backlog totaled $664 million at the end of the first quarter, a 2% decline from the backlog of $678 million at the first-quarter 2023 end. Orders were down 4% year over year to $389 million reflecting weak markets in North America, including timing of warehouse automation orders and continuation of the slower investment profile in the poultry market.
Cash Position and Balance Sheet
John Bean Technologies reported cash and cash equivalents of $479 million at the end of the first quarter compared with $483 million at the end of 2023. The company generated around $10 million in cash from continuing operating activities compared with $11 million in the prior-year quarter. Free cash flow was an inflow of $0.7 million against an outflow of $4.5 million in the first quarter of 2023.
The company’s total debt was $647 million as of Mar 31, 2024, up from $646 million as of Dec 31, 2023.
Guidance for 2024
The company expects revenues between $1.735 billion and $1.765 billion for 2024. The midpoint of the range indicates year-over-year growth of 5%. JBT expects organic growth in the range of 4% to 6%.
Income from continuing operations is likely to be between $142 million and $154 million. Adjusted EBITDA is forecasted in the range of $295 - $310 million, indicating year-over-year growth of 11% at the midpoint. EBITDA margin is likely to be between 17% and 17.5%. JBT had reported adjusted EBITDA margin of 16.4% in 2023.
John Bean expects adjusted earnings per share between $5.05 and $5.45 in 2024. The midpoint of the range suggests 28% year-over-year growth. Margins are expected to sequentially improve through the quarters reflecting improving market conditions and gains from strategic sourcing actions.
Update on JBT’s Pending Combination With Marel
On Apr 4, 2024, JBT and Marel executed a definitive transaction agreement related to JBT’s previously announced intention to make a voluntary takeover offer for the issued and outstanding shares of Marel. Both parties have completed confirmatory due diligence. Subject to regulatory clearance procedures, John Bean continues to expect to close the transaction by the end of 2024.
The proposed merger will unite two renowned companies with complementary product portfolios, well-known brands and advanced technology. The combined company, which is expected to be named JBT Marel Corporation, is poised to become a leading and diversified global food and beverage technology solutions provider. Anticipated benefits of the merger include significant cost synergies exceeding $125 million within three years. JBT Marel is also expected to benefit from additional revenue synergies, given attractive cross-selling, go-to-market effectiveness, scaled innovation and enhanced global customer care capabilities.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended upward during the past month.
VGM Scores
At this time, JBT has a poor Growth Score of F, however its Momentum Score is doing a lot better with a B. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. Notably, JBT has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
JBT is part of the Zacks Manufacturing - Thermal Products industry. Over the past month, Zebra Technologies (ZBRA), a stock from the same industry, has gained 1.3%. The company reported its results for the quarter ended March 2024 more than a month ago.
Zebra reported revenues of $1.18 billion in the last reported quarter, representing a year-over-year change of -16.4%. EPS of $2.84 for the same period compares with $3.94 a year ago.
For the current quarter, Zebra is expected to post earnings of $2.82 per share, indicating a change of -14.3% from the year-ago quarter. The Zacks Consensus Estimate has changed +7.7% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #1 (Strong Buy) for Zebra. Also, the stock has a VGM Score of F.
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John Bean Technologies Corporation (JBT) : Free Stock Analysis Report
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