It has been about a month since the last earnings report for Manitowoc (MTW - Free Report) . Shares have lost about 14.2% 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 its most recent earnings report in order to get a better handle on the important catalysts.
Manitowoc's Q3 Earnings Top, Revenues Meet Estimates
Manitowoc posted third-quarter 2018 adjusted earnings per share of 20 cents, which slumped 45% year over year. However, the bottom-line figure comfortably beat the Zacks Consensus Estimate of 8 cents.
Including special items, the company posted earnings of 32 cents per share compared to 27 cents per share recorded in the prior-year quarter.
Manitowoc’s revenues increased 13%, year over year, to $450 million in the third quarter, driven by improved crane shipments across all regions. The top-line figure came in line with the Zacks Consensus Estimate.
Cost of sales jumped 13% to $370 million in the reported quarter from $327 million in the prior-year quarter. Gross profit climbed 10% year over year to $80 million. Gross margin shrunk 40 basis points to 17.8%.
Engineering, selling and administrative expenses flared up 5% year over year to $62 million. Adjusted EBITDA was $31 million in the quarter under review compared to $23 million witnessed in the year-earlier quarter. Adjusted operating income was $17 million in the quarter, which increased from $10 million reported in the year-ago period.
Backlog in the Sep-end quarter came in at $700 million, up 50% from third-quarter 2017. Third-quarter 2018 orders came in at $458 million, marking a 22% jump from the year-ago quarter.
Manitowoc reported cash and cash equivalents of $91 million at the end of the quarter under review, down from $123 million recorded at the end of 2017. Long-term debt was $265 million as of Sep 30, 2018, compared with $267 million as of Dec 31, 2017.
The company used $441 million of cash in operating activities during the nine-month period ended Sep 30, 2018, compared with cash usage of $294 million reported in the comparable period last year.
Manitowoc raised its full-year 2018 revenue guidance to $1.80-$1.83 billion from $1.78-$1.85 billion. The company affirmed its 2018 adjusted EBITDA guidance of $105-$115 million. Manitowoc also revised its outlook for capital expenditures to roughly $30 million for the current year.
Manitowoc is poised to gain from focus on operational progress using the principles of The Manitowoc Way. 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 -54.74% due to these changes.
At this time, Manitowoc has a poor Growth Score of F, however its Momentum Score is doing a lot better with an A. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. 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.