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Manitowoc (MTW) Beats on Q2 Earnings & Revenues, Revises View

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The Manitowoc Company, Inc. (MTW - Free Report) posted second-quarter 2018 adjusted earnings per share of 40 cents, which surged 122% year over year. The bottom-line figure also beat the Zacks Consensus Estimate of 29 cents.

Including special items, the company posted earnings of 27 cents per share compared to 2 cents per share recorded in the prior-year quarter.

Manitowoc witnessed a 26% year-over-year improvement in sales to $495 million in the second quarter, driven by solid crane shipments across all regions. The top-line figure also surpassed the Zacks Consensus Estimate of $461 million.

The Manitowoc Company, Inc. Price, Consensus and EPS Surprise

 

The Manitowoc Company, Inc. Price, Consensus and EPS Surprise | The Manitowoc Company, Inc. Quote

Operational Update

Cost of sales jumped 27% to $405 million in the reported quarter from $318 million in the prior-year quarter. Gross profit climbed 19% year over year to $91 million. Gross margin shrunk 100 basis points to 18.3%.

Engineering, selling and administrative expenses flared up 6% year over year to $62 million. Adjusted EBITDA was $38 million in the quarter under review compared to $27 million witnessed in the prior-year quarter. Adjusted operating income was $28 million in the quarter, which increased from $18 million reported in the year-ago quarter.

Backlog

Backlog in the June-end quarter came in at $692 million, up 41% from second-quarter 2017. Second-quarter orders came in at $431 million, marking a 14% increase from the year-ago quarter.

Financial Updates

Manitowoc reported cash and cash equivalents of $84 million at the end of Q2, down from $123 million recorded at the end of 2017. Long-term debt was $265 million as of Jun 30, 2018, compared with $267 million as of Dec 31, 2017.

The company used $281 million of cash in operating activities during the six-month period ended Jun 30, 2018, compared with cash usage of $191 million reported in the comparable period last year.

Guidance

Manitowoc affirmed its full-year 2018 revenues guidance of approximately $1.78-$1.85 billion. The company revised its 2018 adjusted EBITDA guidance to $105-$115 million from the prior view of $100-$120 million. However, Manitowoc reaffirmed its outlook for capital expenditures at roughly $25-$30 million.

Manitowoc is poised to gain from the transformation into a leaner and profitable crane company.  Nonetheless, material inflation, tariffs and supply-chain challenges remain concerns. Also, foreign currency exchange rates are putting pressure on its margins.

Share Price Performance

Over the past year, Manitowoc has underperformed the industry with respect to price performance. The stock has lost around 14%, while the industry recorded growth of 22%.

Zacks Rank & Other Stocks to Consider

Manitowoc currently flaunts a Zacks Rank #1 (Strong Buy).

Some other similarly-ranked stocks in the same sector include Caterpillar Inc. (CAT - Free Report) , Chart Industries, Inc. (GTLS - Free Report) and W.W. Grainger, Inc. (GWW - Free Report) . You can see the complete list of today’s Zacks #1 Rank stocks here.

Caterpillar has a long-term earnings growth rate of 13.3%. The stock has gained around 22% in a year’s time.

Chart Industries has a long-term earnings growth rate of 26.9%. The company’s shares have appreciated 126% over the past year.

Grainger has a long-term earnings growth rate of 12.5%. Its shares have rallied nearly 106% in the past year.

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