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Acquisitions to Aid Manitowoc (MTW) Amid Inflated Costs
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The Manitowoc Company (MTW - Free Report) stands to gain from its investment in new product development programs, acquisitions as well as efforts to grow the aftermarket business. Its cost-saving actions will aid the company counter the impact of the ongoing inflationary pressures and supply-chain challenges.
MTW has been witnessing a drop in order levels lately, owing to weak customer spending. However, order levels will eventually pick up due to increased infrastructure spending in the United States as well as in the Middle East.
Weak Consumer Spending, Costs to Hurt 2022 Results
Manitowoc reported adjusted earnings per share of 10 cents in third-quarter 2022, which improved 67% year over year. Revenues were up 12% year over year to $455 million. MTW’s orders were down 12.7% year over year to $434 million. The company’s order levels have been impacted in the past few quarters due to ongoing supply-chain and logistics challenges.
The global economic uncertainty is weighing on customer sentiment, which is making them spend cautiously. The company is also facing higher steel, logistics, and transportation costs. MTW thus expects adjusted EBITDA in 2022 to come in at the lower end of the earlier provided guidance of $130-$160 million.
Strategies to Grow Business in Place
The company's focus on innovation will continue to aid it in leading the industry by providing differentiated products that add value to customers. Its aftermarket business continues to perform well, and the company is taking steps to further expand it. In sync with this, Manitowoc acquired the crane business of H&E Equipment Services (HEES - Free Report) in October 2021.
Manitowoc had also acquired the assets of Aspen Equipment Company, which expanded its presence in Nebraska, Iowa and Minnesota and provided after-sales services to a diversified end market. In October 2022, the company completed the acquisition of certain assets of the crane rental fleet of Honnen Equipment Company thereby adding Colorado, Wyoming and Nebraska to its footprint.
The company remains focused on cash preservation and balance sheet management while funding critical programs for future growth. It continues to evaluate acquisition opportunities to accelerate product development programs in its all-terrain product line.
Manitowoc is scaling up its Chinese tower crane business and has launched six new crane models, which have received positive customer feedback. Notably, the tower crane market in China is the largest tower crane market in the world. The company invested $15 million in its tower crane rental fleet in Europe, which helped it gain market share in Germany as well as win some strategic orders with key accounts.
Demand Expected to Pick Up
In North America, demand from residential and non-residential construction will bolster demand for Manitowoc’s equipment going forward. The rising investment in roads, bridges, airports and waterways due to the U.S. Infrastructure Investment and Jobs Act, represents a massive opportunity.
Demand in the Middle East is expected to be robust going forward. Saudi Arabia’s government has committed more than $1 trillion to a diverse slate of ambitious projects. Qatar and Kuwait are showing promising signs of growth. This bodes well for Manitowoc.
Price Performance
Image Source: Zacks Investment Research
In the past year, Manitowoc's shares have slumped 52.1% compared with the industry's growth of 13.1%.
Zacks Rank and Stocks to Consider
Manitowoc currently carries a Zacks Rank #3 (Hold).
Hubbell’s earnings surprise in the last four quarters was 10.6%, on average. In the past 60 days, its earnings estimates have increased 6.1% for 2022. For the ongoing year, the bottom line is estimated to be $10.4, suggesting growth of 29.3% from the previous-year’s level. The HUBB stock has gained 20.3% in the past year.
W.W. Grainger delivered a trailing four-quarter earnings surprise of 10.1%, on average. Current-year earnings are estimated to be $29.31 per share at present, suggesting an estimated growth of 161.1% from the year-ago reported figure. The estimates have moved up 4.4% in the last 60 days. GWW’s shares have risen 17.3% in the past year.
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Acquisitions to Aid Manitowoc (MTW) Amid Inflated Costs
The Manitowoc Company (MTW - Free Report) stands to gain from its investment in new product development programs, acquisitions as well as efforts to grow the aftermarket business. Its cost-saving actions will aid the company counter the impact of the ongoing inflationary pressures and supply-chain challenges.
MTW has been witnessing a drop in order levels lately, owing to weak customer spending. However, order levels will eventually pick up due to increased infrastructure spending in the United States as well as in the Middle East.
Weak Consumer Spending, Costs to Hurt 2022 Results
Manitowoc reported adjusted earnings per share of 10 cents in third-quarter 2022, which improved 67% year over year. Revenues were up 12% year over year to $455 million. MTW’s orders were down 12.7% year over year to $434 million. The company’s order levels have been impacted in the past few quarters due to ongoing supply-chain and logistics challenges.
The global economic uncertainty is weighing on customer sentiment, which is making them spend cautiously. The company is also facing higher steel, logistics, and transportation costs. MTW thus expects adjusted EBITDA in 2022 to come in at the lower end of the earlier provided guidance of $130-$160 million.
Strategies to Grow Business in Place
The company's focus on innovation will continue to aid it in leading the industry by providing differentiated products that add value to customers. Its aftermarket business continues to perform well, and the company is taking steps to further expand it. In sync with this, Manitowoc acquired the crane business of H&E Equipment Services (HEES - Free Report) in October 2021.
Manitowoc had also acquired the assets of Aspen Equipment Company, which expanded its presence in Nebraska, Iowa and Minnesota and provided after-sales services to a diversified end market. In October 2022, the company completed the acquisition of certain assets of the crane rental fleet of Honnen Equipment Company thereby adding Colorado, Wyoming and Nebraska to its footprint.
The company remains focused on cash preservation and balance sheet management while funding critical programs for future growth. It continues to evaluate acquisition opportunities to accelerate product development programs in its all-terrain product line.
Manitowoc is scaling up its Chinese tower crane business and has launched six new crane models, which have received positive customer feedback. Notably, the tower crane market in China is the largest tower crane market in the world. The company invested $15 million in its tower crane rental fleet in Europe, which helped it gain market share in Germany as well as win some strategic orders with key accounts.
Demand Expected to Pick Up
In North America, demand from residential and non-residential construction will bolster demand for Manitowoc’s equipment going forward. The rising investment in roads, bridges, airports and waterways due to the U.S. Infrastructure Investment and Jobs Act, represents a massive opportunity.
Demand in the Middle East is expected to be robust going forward. Saudi Arabia’s government has committed more than $1 trillion to a diverse slate of ambitious projects. Qatar and Kuwait are showing promising signs of growth. This bodes well for Manitowoc.
Price Performance
Image Source: Zacks Investment Research
In the past year, Manitowoc's shares have slumped 52.1% compared with the industry's growth of 13.1%.
Zacks Rank and Stocks to Consider
Manitowoc currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Industrial Products sector are Hubbell (HUBB - Free Report) and W.W. Grainger (GWW - Free Report) . While HUBB sports a Zacks Rank #1 (Strong Buy), GWW holds a Zacks Rank #2 (Buy) at present. You can see the complete list of today's Zacks #1 Rank stocks here.
Hubbell’s earnings surprise in the last four quarters was 10.6%, on average. In the past 60 days, its earnings estimates have increased 6.1% for 2022. For the ongoing year, the bottom line is estimated to be $10.4, suggesting growth of 29.3% from the previous-year’s level. The HUBB stock has gained 20.3% in the past year.
W.W. Grainger delivered a trailing four-quarter earnings surprise of 10.1%, on average. Current-year earnings are estimated to be $29.31 per share at present, suggesting an estimated growth of 161.1% from the year-ago reported figure. The estimates have moved up 4.4% in the last 60 days. GWW’s shares have risen 17.3% in the past year.