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Why Is Manitowoc (MTW) Up 7.6% Since Last Earnings Report?

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It has been about a month since the last earnings report for Manitowoc (MTW - Free Report) . Shares have added about 7.6% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Manitowoc due for a pullback? 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 catalysts.

Manitowoc Beats on Q4 Earnings & Revenue Estimates
 
Manitowoc delivered fourth-quarter 2018 adjusted earnings per share of 16 cents, which beat the Zacks Consensus Estimate of 5 cents by a wide margin. Further, the company reversed its prior-year quarter’s loss of 15 cents per share.
 
Including special items, the company reported loss of $2.20 per share in fourth-quarter 2018 compared with 98 cents per share recorded in the prior-year quarter.
 
Manitowoc’s revenues increased 7% year over year to $515 million in fourth-quarter 2018. The top line surpassed the Zacks Consensus Estimate of $487.3 million. The company witnessed improved demand in the Americas driven by higher shipments of cranes for the commercial construction and energy end markets. This was partially offset by lower demand in the Benelux and Middle-East regions. Unfavorable changes in foreign currency exchange rates negatively impacted sales in the reported quarter.
 
Operational Update
 
Cost of sales rose 6% to $426 million in the reported quarter from $400 million in the prior-year quarter. Gross profit climbed 10% year over year to $89 million. Gross margin expanded 40 basis points to 17.3%.
 
Engineering, selling and administrative expenses remained flat at $67 million. Adjusted EBITDA was $31 million in the quarter under review compared with $24 million witnessed in the prior-year quarter. Adjusted operating income was $22.2 million in the quarter, which increased from $14.7 million reported in the year-ago period.
 
Backlog
 
Backlog at fiscal 2018 end came in at $671 million, up 11% from 2017-end. Fourth-quarter 2018 orders came in at $485.7 million, down 22% from the year-ago quarter. Full-year 2018 orders improved 3% year over year to $1,910.7 million.
 
Financial Updates
 
Manitowoc reported cash and cash equivalents of $140 million at the end of fiscal 2018, up from $123 million recorded at the end of 2017. Long-term debt was $267 million as of Dec 31, 2018, flat compared with Dec 31, 2017.
 
The company used $513 million of cash in operating activities during 2018, compared with cash usage of $325 million reported last year.
 
2018 Results
 
Manitowoc reported adjusted earnings per share of 64 cents in 2018 against a loss per share of 27 cents reported in the prior year. Earnings surpassed the Zacks Consensus Estimate of 53 cents. Sales increased 17% year over year to $1.85 billion, coming ahead of the Zacks Consensus Estimate of $1.82 billion.
 
2019 Guidance
 
Manitowoc initiated 2019 revenue guidance at $1.85-$1.95 billion and EBITDA guidance at $125-$145 million. Manitowoc projects capital expenditures of $35 million for the current year.
 

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in fresh estimates. The consensus estimate has shifted 96.82% due to these changes.

VGM Scores

At this time, Manitowoc has a strong Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. Charting a somewhat similar path, the stock was allocated a grade of A on the value side, putting it in the top quintile 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.

Outlook

Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Manitowoc has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.




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