It has been about a month since the last earnings report for John Bean (JBT Quick QuoteJBT - Free Report) . Shares have lost about 7.6% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is JBT due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

John Bean Earnings and Revenues Surpass Estimates in Q4

John Bean reported adjusted earnings of $1.02 per share in fourth-quarter 2020, surpassing the Zacks Consensus Estimate of 89 cents by a margin of 15%. However, the bottom line declined 32% from the prior-year quarter reflecting the impact of the COVID-19 pandemic as reductions in global passenger air travel and global foodservice production impacted demand for the company’s products and services.

On a reported basis, the company’s earnings per share was 94 cents compared with the prior-year quarter’s $1.31.

Revenues of $439 million beat the Zacks Consensus Estimate of $428 million. Further, the top line slumped 20% from the prior-year quarter figure of $545 million.

In the reported quarter, the company’s total orders went up 2% to $492 million from the prior-year quarter. Orders in the JBT FoodTech segment dipped 2% year over year to $364 million. In the JBT AeroTech segment, orders improved 14% to $128 million from the prior-year quarter.

Backlog in the FoodTech segment increased 6% from the year-ago quarter to $427 million as of fourth-quarter 2020 end. The AeroTech segment’s backlog was $287 million at the end of the reported quarter, down 6% from the prior-year quarter. Total backlog of $713 million as of the end of the fourth quarter was up 1% year over year.

Cost and Margins

Cost of sales decreased 19% year over year to $306 million in the fourth quarter. Gross profit slumped 21% year over year to $133 million. Gross margin came in at 30.3% compared with the year-earlier quarter’s 30.8%.

Selling, general and administrative expenses were down 14% year over year to $89 million. Adjusted operating profit declined 32% year over year to $47 million. Adjusted operating margin was 10.7%, down 200 basis points from 12.7% in the prior-year quarter. In the reported quarter, adjusted EBITDA was around $660 million, reflecting a year-over-year plunge of 25%. Adjusted EBITDA margin was 15%, down from 16% in the year-ago quarter.

Segment Performance

JBT FoodTech: Net sales fell 10% year over year to $321 million as  increase in recurring revenues was offset by decline in equipment demand. Adjusted operating profit amounted to $43.6 million, reflecting a decline of 18% from the prior-year quarter.

JBT AeroTech: Net sales were $118 million, reflecting a decline of 37% from the prior-year quarter. The segment’s adjusted operating profit plunged 56% year over year to $12.7 million.

Financial Performance

John Bean reported cash and cash equivalents of around $47.5 million at the end of 2020, up from $39.5 million at the end of fiscal 2019. The company generated around $252 million of cash from operating activities during 2020 compared with $111 million in the prior year. At the end of 2020, long-term debt was $522 million, down from $698 million as of end of 2019.

2020 Results

John Bean’s adjusted earnings per share in 2020 was $3.94, down 21% from the prior-year’s figure of $4.96. However, the bottom line beat the Zacks Consensus Estimate of $3.83. Including one-time items, the company delivered an earnings per share of $3.39 in 2020 compared with $4.03 in 2019. Sales declined 11% year over year to $1,729 million from the prior-year figure of $1,946 million. The top line surpassed the Zacks Consensus Estimate of $1,720 million.

Guidance

John Bean expects the seasonally slower first-quarter 2021 revenues to be $400-$425 million. While the FoodTech segments revenues for the ongoing quarter are projected between $300 million and $315 million, the same for the AeroTech segment are anticipated in the range of $100 million to $110 million.

The FoodTech segment’s operating margins are expected in the band of 13% to 13.5% and adjusted EBITDA margins to be 18.25-18.75%. For AeroTech, operating margins are forecasted to be 7.0-7.5%, while adjusted EBITDA margins are expected between 8.0% and 8.5%. Earnings per share for first-quarter 2021 is expected to range between 70 cents to 80 cents.

For 2021, John Bean anticipates an increase of 5-8% in revenues for the FoodTech segment. Operating margins are expected between 14% and 15%, and adjusted EBITDA margins in the band of 19.5% to 20%.

The AeroTech segment’s revenue growth is expected to be flat to 5% in 2021. Operating margins are anticipated between 10.75% and 11.25%, and adjusted EBITDA margins in the range of 12.0% to 12.5%.

The company projects adjusted earnings per share to be $4.30-$4.55 for 2021. The mid-point of the guidance range suggests growth of 12% from earnings of $3.94 per share in 2020.

How Have Estimates Been Moving Since Then?

It turns out, estimates review flatlined during the past month. The consensus estimate has shifted -5.61% due to these changes.

VGM Scores

Currently, JBT has a strong Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

JBT has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.