On Jul 10, we issued an updated research report on The Manitowoc Company Inc.
(MTW - Free Report
) . Improvement in the cranes market, focus on consolidating manufacturing footprint, reduction in cost of organizational structure and product innovation positions the company well for the future.
Improved Q1, Upbeat 2018 Outlook
Manitowoc reported a loss of 12 cents in first-quarter 2018, a considerable improvement from the year-ago quarter’s loss of 69 cents. Its top-line increased 26% on a year-over-year basis to $386 million driven by improved crane shipments across all regions.
For 2018, Manitowoc projects revenues within $1.775 billion and $1.85 billion. Adjusted EBITDA is anticipated to lie between $100 million and $120 million. Compared with the adjusted EBITDA of $67.4 million in 2017, the mid-point of the guidance reflects an increase of 63%.
The company will continue to gain from its focus on consolidating manufacturing footprint and reducing cost of organizational structure as well as pricing actions.
The Zacks Consensus Estimate for fiscal 2018 for earnings is at 54 cents, reflecting an impressive 308% year-over-year growth while revenues is at $1.81 billion, projecting year-over-year improvement of 15%.
New Products, Mending Crane Market to Boost Revenues
Manitowoc’s first-quarter orders were pegged at $536 million, up 10% year over year. The crane market is recovering driven by strength in commercial construction and energy end markets. The company is witnessing higher year-over-year demand in the Americas and European regions.
Revenues are also being driven by new products. New and innovative products introduced since Manitowoc became a stand-alone crane company, now generate around 40% of its revenues. Backlog at the quarter-end came in at $756.6 million, up 49% from the prior-year quarter. Currently, over 90% of the year-end backlog is scheduled to be shipped by the end of 2018.
Poised Well on the Manitowoc Way
The company is poised well for the long term as evident from its significant progress in the implementation of The Manitowoc Way to boost the four key strategic priorities — margin expansion, growth, innovation and velocity — that are likely to aid in delivering double-digit margin growth in the long term.
Margin expansion remains the first priority. Manitowoc continues to align manufacturing capacity to match the current levels of demand. The company remains focused on cost controls, reducing headcount, increasing productivity and eliminating waste. To drive growth — the second component, the company among other initiatives, has taken efforts to strengthen its distribution network. To ensure growth, Manitowoc implemented key account management on a global basis this year, which has already started to reap benefits.
Innovation is the company’s third key priority. Manitowoc’s new product pipeline continues to be strong. The fourth key strategic priority is velocity. The company implemented these initiatives to grow its boom truck business, a highly customized crane with a variety of commercial truck configurations.
Ahead of the Industry
Manitowoc's stock has outperformed the industry
in the past month. The stock dipped 1.1%, faring better than the industry’s decline of 9.2%.
Zacks Rank & Other Stocks to Consider
Some other top-ranked stocks in the sector include Actuant Corporation (ATU - Free Report
) , DMC Global Inc. (BOOM - Free Report
) and Luxfer Holdings PLC (LXFR - Free Report
) . All of these stocks flaunt a Zacks Rank #1.
The Zacks Consensus Estimate for earnings for fiscal 2018 for Actuant has gone up 3% over the past 30 days and is pegged at $1.06 per share. It reflects year-over-year growth pf 28%. Its shares have gained 12% over the past month.
The Zacks Consensus Estimate for earnings for fiscal 2018 for DMC Global has moved up 6% over the past 30 days. The estimate is now at $2.03 per share, a substantial improvement from the 16 cents reported in fiscal 2017. The company’s shares have gone up 7% in the past month.
Luxfer Holdings’ Zacks Consensus Estimate for earnings for fiscal 2018 has undergone a 10% positive revision over the past 60 days and is pegged at $1.29 per share. It reflects year-over-year growth of 26%. Its shares have gained 1% over the past month.
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