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John Bean (JBT) Q2 Earnings and Revenues Beat Estimates

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John Bean Technologies Corporation (JBT - Free Report) reported adjusted earnings of $1.09 per share in second-quarter 2020, surpassing the Zacks Consensus Estimate of 73 cents by a margin of 49%. However, the bottom line declined 23% from the prior-year quarter.

On a reported basis, the company’s earnings per share was $1.01 compared with the prior-year quarter’s $1.06.

Revenues of $412 million in the reported quarter beat the Zacks Consensus Estimate of $399 million. Further, the top line declined 17% from the prior-year quarter figure of $493 million. A 5% contribution from acquisitions was offset by a decline of 20% in organic sales and an unfavorable impact of foreign exchange of 2%.

John Bean Technologies Corporation Price, Consensus and EPS Surprise

John Bean Technologies Corporation Price, Consensus and EPS Surprise

John Bean Technologies Corporation price-consensus-eps-surprise-chart | John Bean Technologies Corporation Quote

In the reported quarter, the company’s total orders went down 26% to $344.6 million from the prior-year quarter. Orders in the JBT FoodTech segment totaled $262.7 million, reflecting a year-over-year decline of 15%. In the JBT AeroTech segment, orders declined to $81.9 million from $159.3 million reported in the prior-year quarter.

Backlog in the FoodTech segment declined 14% year over year to $360 million. The AeroTech segment’s backlog came in at $283 million in the reported quarter, down 19% from the prior-year quarter. Total backlog of $643.1 million as of the second quarter end was down 16% year over year.

Cost and Margins

Cost of sales decreased 17% year over year to $281 million in the second quarter. Gross profit declined 16% year over year to $130 million. Gross margin came in at 31.6% compared with the year-earlier quarter’s 31.4%.

Selling, general and administrative expenses were down 22% year over year to $81 million. Adjusted operating profit declined 18% year over year to $50.7 million. Adjusted operating margin was 12.3% compared with prior-year quarter’s 12.6%.  In the reported quarter, adjusted EBITDA came in at $68.4 million, down 12% year over year.

Segment Performance

JBT FoodTech: Net sales fell 12% year over year to $303 million. Adjusted operating profit amounted to $49 million, down 12% from the prior-year quarter.

JBT AeroTech: Net sales were $109, reflecting a decline of 28% from the prior-year quarter. The segment’s adjusted operating profit slumped 44% year over year to $10.3 million.

Financial Performance

John Bean reported cash and cash equivalents of $58 million at the end of second-quarter 2020, up from $39.5 million at the end of fiscal 2019. The company generated around $101 million of cash from operating activities during the first half of 2020 compared with the $13 million reported in the prior-year comparable period. At the end of second-quarter 2020, long-term debt was $648 million, down from $698 million as of Dec 31, 2019.

Guidance

Despite the ongoing uncertainty related to the coronavirus pandemic, the company expects orders to improve on a sequential basis in both the FoodTech and AeroTech segments in third-quarter 2020. However, this increase in levels of customer engagement is expected to result in higher costs in the quarter. John Bean anticipates a sequential decline in revenues and operating profit in third-quarter 2020.

For third-quarter 2020, John Bean anticipates a sequential decline of 10-12% in revenues for the FoodTech segment. Margins are expected to be flat compared with first-quarter 2020.

The AeroTech segment’s revenue is expected to increase 6-8% in the third quarter owing to typical seasonality. Margins are expected to improve 75-100 basis points sequentially.

Further, in third-quarter 2020, John Bean expects to incur restructuring and other charges of $8-$9 million related to manufacturing capacity rationalizations at both of the segments. This action is expected to generate permanent run rate benefits of $6-$7 million by the end of 2021. It expects to incur a $1.5 million discrete tax charge in connection with new U.K. tax laws.

Price Performance

John Bean's shares have gained 31.34% in the past year compared with the industry’s growth of 25.2%.

Zacks Rank & Other Stocks to Consider

John Bean carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Some other top-ranked stocks in the Industrial Products sector are Silgan Holdings Inc. (SLGN - Free Report) , IIVI Incorporated (IIVI - Free Report) and Energous Corporation (WATT - Free Report) . While Silgan and IIVI sport a Zacks Rank #1, Energous carries a Zacks Rank of 2, at present.

Silgan has a projected earnings growth rate of 28.7% for the current year. The company’s shares have appreciated 13% in the past three months.

IIVI has an estimated earnings growth rate of 29% for the ongoing year. The company’s shares have rallied 51% in three months’ time.

Energous has an expected earnings growth rate of 44% for 2020. The stock has soared 44% over the past three months.

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