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Manitowoc (MTW) Q2 Earnings Beat Estimates on Solid Demand
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The Manitowoc Company, Inc. (MTW - Free Report) reported second-quarter 2021 earnings of 60 cents, which beat the Zacks Consensus Estimate of 9 cents by a whopping margin of 567%, courtesy of better-than-expected demand for its products. The figure marked a turnaround from the year-ago quarter’s loss of 47 cents per share. Backed by this performance, Manitowoc shares closed 2.02% higher at $23.26 on Aug 5.
Including one-time items, the company reported earnings per share of 50 cents in the quarter against a loss of 37 cents in the prior-year quarter.
Manitowoc’s revenues surged 41% to $464 million from the prior-year quarter figure of $328 million. The top line beat the Zacks Consensus Estimate of $374 million by 24%.
Orders in the reported quarter increased 126% year over year to $537.2 million. Backlog as of the end of the reported quarter was $736.1 million, up 71% from the year-ago quarter’s end.
The Manitowoc Company, Inc. Price, Consensus and EPS Surprise
Cost of sales increased 33% year over year to $373 million in the reported quarter. Gross profit improved 87% year over year to $90.4 million. Gross margin was 19.5% in the reported quarter compared with 48.4% in the prior-year quarter.
Adjusted engineering, selling and administrative expenses rose 19.5% year over year to $59.4 million. Adjusted operating income was $30.9 million in the quarter against an operating loss of $1.4 million in the prior-year quarter. Adjusted EBITDA in the reported quarter was $40.7 million, up 422% from $7.8 million in second-quarter 2020. Adjusted EBITDA margin expanded 640 basis points year over year to 8.8% in the quarter under review.
Financial Updates
Manitowoc reported cash and cash equivalents of $158.5 million as of Jun 30. 2021, up from $128.7 million as of Dec 31, 2020. Long-term debt was $300 million as of Jun 30, 2021, flat compared with Dec 31, 2020. The company generated $49.7 million of cash in operating activities in first half of 2021 compared with cash utilization of $98.7 million in the prior-year comparable period.
Acquisition of H&E Equipment’s Crane Business
On Jul 20, Manitowoc announced that it has entered into a definitive agreement to acquire the crane business of H&E Equipment Services, Inc. (HEES - Free Report) , one of the largest rental equipment companies in the United States. H&E’s crane business operates with 11 full-service branch locations.
Manitowoc is expected to pay approximately $130 million funded by a combination of cash on hand and existing debt availability. Subject to customary closing conditions and regulatory approvals, the deal is expected to close in fourth-quarter 2021. The acquisition will expand Manitowoc’s ability to provide rentals, new sales, used sales, aftermarket parts, and service to a variety of end market customers. This is in sync with Manitowoc’s intent is to grow through four strategic priorities, one of which is acquisitions focused on growing its aftermarket business.
Outlook
Manitowoc has been witnessing positive trends in crane demand. It anticipates rising inflation, supply chain shortages, and skilled labor constraints to impact results in the back half of the year.
Manitowoc expects revenues in the range of $1.775 to $1.825 billion in 2021. Adjusted EBITDA is now anticipated between $105 million and $115 million, up from its prior guidance of $90 million-$105 million. The mid-point of the new range indicates growth of 32% from the adjusted EBITDA of $83.1 million in 2020.
Share Price Performance
Image Source: Zacks Investment Research
Over the past year, Manitowoc’s shares have gained 132.9%, compared with the industry’s rally of 53.3%.
Zacks Rank and Stocks to Consider
Manitowoc currently carries a Zacks Rank #4 (Sell).
Image: Bigstock
Manitowoc (MTW) Q2 Earnings Beat Estimates on Solid Demand
The Manitowoc Company, Inc. (MTW - Free Report) reported second-quarter 2021 earnings of 60 cents, which beat the Zacks Consensus Estimate of 9 cents by a whopping margin of 567%, courtesy of better-than-expected demand for its products. The figure marked a turnaround from the year-ago quarter’s loss of 47 cents per share. Backed by this performance, Manitowoc shares closed 2.02% higher at $23.26 on Aug 5.
Including one-time items, the company reported earnings per share of 50 cents in the quarter against a loss of 37 cents in the prior-year quarter.
Manitowoc’s revenues surged 41% to $464 million from the prior-year quarter figure of $328 million. The top line beat the Zacks Consensus Estimate of $374 million by 24%.
Orders in the reported quarter increased 126% year over year to $537.2 million. Backlog as of the end of the reported quarter was $736.1 million, up 71% from the year-ago quarter’s end.
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 increased 33% year over year to $373 million in the reported quarter. Gross profit improved 87% year over year to $90.4 million. Gross margin was 19.5% in the reported quarter compared with 48.4% in the prior-year quarter.
Adjusted engineering, selling and administrative expenses rose 19.5% year over year to $59.4 million. Adjusted operating income was $30.9 million in the quarter against an operating loss of $1.4 million in the prior-year quarter. Adjusted EBITDA in the reported quarter was $40.7 million, up 422% from $7.8 million in second-quarter 2020. Adjusted EBITDA margin expanded 640 basis points year over year to 8.8% in the quarter under review.
Financial Updates
Manitowoc reported cash and cash equivalents of $158.5 million as of Jun 30. 2021, up from $128.7 million as of Dec 31, 2020. Long-term debt was $300 million as of Jun 30, 2021, flat compared with Dec 31, 2020. The company generated $49.7 million of cash in operating activities in first half of 2021 compared with cash utilization of $98.7 million in the prior-year comparable period.
Acquisition of H&E Equipment’s Crane Business
On Jul 20, Manitowoc announced that it has entered into a definitive agreement to acquire the crane business of H&E Equipment Services, Inc. (HEES - Free Report) , one of the largest rental equipment companies in the United States. H&E’s crane business operates with 11 full-service branch locations.
Manitowoc is expected to pay approximately $130 million funded by a combination of cash on hand and existing debt availability. Subject to customary closing conditions and regulatory approvals, the deal is expected to close in fourth-quarter 2021. The acquisition will expand Manitowoc’s ability to provide rentals, new sales, used sales, aftermarket parts, and service to a variety of end market customers. This is in sync with Manitowoc’s intent is to grow through four strategic priorities, one of which is acquisitions focused on growing its aftermarket business.
Outlook
Manitowoc has been witnessing positive trends in crane demand. It anticipates rising inflation, supply chain shortages, and skilled labor constraints to impact results in the back half of the year.
Manitowoc expects revenues in the range of $1.775 to $1.825 billion in 2021. Adjusted EBITDA is now anticipated between $105 million and $115 million, up from its prior guidance of $90 million-$105 million. The mid-point of the new range indicates growth of 32% from the adjusted EBITDA of $83.1 million in 2020.
Share Price Performance
Image Source: Zacks Investment Research
Over the past year, Manitowoc’s shares have gained 132.9%, compared with the industry’s rally of 53.3%.
Zacks Rank and Stocks to Consider
Manitowoc currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the Industrial Products sector are Mueller Industries, Inc. (MLI - Free Report) , and Greif, Inc. (GEF - Free Report) . Both of these stocks carry a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Mueller Industries has an estimated earnings growth rate of 154% for the ongoing year. The company’s shares have rallied 45.2% in the past year.
Greif has an expected earnings growth rate of 47% for 2021. Over the past year, the stock has climbed 62.2%.