Manitowoc's (MTW) Loss Narrows in Q1, Revenues Top Estimates

The Manitowoc Company, Inc. MTW posted first-quarter 2018 adjusted loss per share of 12 cents compared to the prior-year quarter’s loss of 69 cents per share. Results came in narrower than the Zacks Consensus Estimate of a loss of 23 cents per share.

Including special items, the company posted loss of 28 cents in the reported quarter. It had reported a loss of $1.03 per share in the year-ago quarter.

Manitowoc witnessed a 26% year-over-year improvement in sales to $386 million in the first quarter, driven by improved crane shipments across all regions. Revenues also beat the Zacks Consensus Estimate of $374 million.

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

 

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

Operational Update

Cost of sales jumped 25% to $318 million in the reported quarter from $254 million in the prior-year quarter. Gross profit climbed 32% year over year to $68 million. Gross margin expanded 70 basis points to 17.7%.

Engineering, selling and administrative expenses dipped 1.6% year over year to $60 million. Adjusted EBITDA was $17 million in the reported quarter compared to $1 million in the prior-year quarter. Adjusted operating income was $8 million in the reported quarter.

Backlog

Backlog in the first quarter came in at $757 million, up 49% from first-quarter 2017. First-quarter orders were at $536 million, a 10% increase from the prior-year quarter.

Financial Updates

Manitowoc reported cash and cash equivalents of $99 million at the end of the first quarter, down from $123 million recorded at the end of 2017. Long-term debt was $266 million as of Mar 31, 2018, compared with $267 million as of Dec 31, 2017.

The company used $173 million of cash in operating activities during the quarter compared with cash usage of $109 million posted in the prior-year period.

Guidance

Manitowoc revised its full-year 2018 financial guidance. It expects that revenues will be approximately $1.78-$1.85 billion for the full year. The company raised 2018 adjusted EBITDA guidance to $100-$120 million from the prior view of $96-$116 million. However, Manitowoc reaffirmed its outlook for depreciation of around $39 million and capital expenditures at roughly $25-$30 million.

Manitowoc is poised to gain from the transformation into a leaner and profitable crane company. However, materials inflation and supply-chain challenges remain concerns. Also, foreign currency exchange rates are putting pressure on its margins.

Share Price Performance

Over the past year, Manitowoc has underperformed the industry with respect to price performance. The stock has gained around 11%, while the industry recorded growth of 46%.

Zacks Rank & Stocks to Consider

Currently, Manitowoc carries a Zacks Rank #3 (Hold).

Better-ranked stocks in the same sector include Caterpillar Inc. CAT, Terex Corporation TEX and H&E Equipment Services, Inc. HEES. While Caterpillar and Terex sport a Zacks Rank #1 (Strong Buy), H&E Equipment Services carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Caterpillar has a long-term earnings growth rate of 13.3%. The stock has appreciated 51% in a year’s time.

Terex has a long-term earnings growth rate of 20.2%. The company’s shares have been up 23% during the past year.

H&E Equipment Services has a long-term earnings growth rate of 17.4%. Its shares have rallied 69% in the past year.

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