It has been about a month since the last earnings report for Manitowoc (MTW - Free Report) . Shares have lost about 5.3% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Manitowoc due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Manitowoc Beats on Q2 Earnings & Revenues, Revises View
Manitowoc 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.
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 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.
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.
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 straining its margins.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates. The consensus estimate has shifted -51.15% due to these changes.
At this time, Manitowoc has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Manitowoc has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.