A month has gone by since the last earnings report for The Manitowoc Company, Inc. (MTW - Free Report) . Shares have added about 8% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? 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 catalysts.
Manitowoc Tops Q2 Earnings, Misses Sales, Updates View
Manitowoc reported second-quarter 2017 adjusted earnings of $0.05 per share, up 67% from $0.03 reported in the year-ago quarter. The year-over-year improvement was mainly driven by focus on consolidating manufacturing footprint and reducing cost of organizational structure. Earnings also beat the Zacks Consensus Estimate of a loss of $0.03 per share.
Including special items, the company posted break-even results in the reported quarter. It had posted loss of $0.04 per share in the year-ago quarter.
Manitowoc witnessed a 13.8% year-over-year decline in sales to $394.6 million in the reported quarter, adversely affected by dismal crawler crane shipments in the Americas and lower rough-terrain crane shipments primarily in the Americas and the Middle East, primarily due to poor demand in the oil and gas market. In addition, revenues missed the Zacks Consensus Estimate of $401 million.
Cost of sales declined 14% to $318.3 million in the reported quarter from $370.4 million in the prior-year quarter. Gross profit dipped 12.6% year over year to $76.3 million. Gross margin expanded 30 basis points to 19.3%.
Engineering, selling and administrative expenses descended 17.7% year over year to $60.4 million. Adjusted operating income was $15.9 million compared to $13.9 million in the year-ago quarter.
Backlog for the quarter came in at $491 million as of Jun 30, 2017, up 25% from $393.5 million in second-quarter 2016. Second-quarter orders of $379.5 million, which included the initial production order related to the U.S. Army contract, were up 9% from the comparable period in the last year.
Manitowoc ended the quarter with cash and temporary investments of $26.3 million compared with $69.9 million at year-end 2016. Long-term debt was $278 million as of Jun 30, 2017, compared with $269 million as of Dec 31, 2016. The company recorded cash used for operating activities of $11.9 million in the reported quarter compared with cash usage of $15.4 million recorded in the year-ago quarter.
Manitowoc updated its full-year 2017 financial guidance. The company now expects revenues to decline approximately 5–7% year over year in 2017. Adjusted EBITDA is anticipated to lie between $59 million and $69 million. Depreciation is projected at approximately $40 million. Capital expenditures are estimated at approximately $30 million.
Manitowoc remains cautiously optimistic in the near term as it continues to focus on delivering value through innovative products. The company anticipates to achieve its long-term target of double-digit operating margins by 2020 and becoming the leading global crane company as the market recovers.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed an upward trend in fresh estimates. There have been six revisions higher for the current quarter compared to one lower.
At this time, Manitowoc's stock has a great Growth Score of A, though it is lagging a bit on the momentum front with a B. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate that the stock is more suitable for growth investors than momentum investors.
Estimates have been trending upward for the stock. The magnitude of these revisions also looks promising. Notably, the stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.