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Manitowoc (MTW) Down 13.1% Since Last Earnings Report: Can It Rebound?

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A month has gone by since the last earnings report for Manitowoc (MTW - Free Report) . Shares have lost about 13.1% 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 Q1 Earnings & Sales Top Estimates, Up Y/Y

Manitowoc delivered first-quarter 2019 adjusted earnings per share of 8 cents, beating the Zacks Consensus Estimate of a loss of 2 cents by a wide margin. Further, the company reversed its prior-year quarter’s loss of 12 cents per share.

Including special items, the company reported loss of 75 cents per share in first-quarter 2019, wider than the 28 cents per share recorded in the prior-year quarter.

Manitowoc’s revenues increased 8.3% year over year to $418 million in the reported quarter. The top-line figure also surpassed the Zacks Consensus Estimate of $394 million. This upside was driven by higher crane shipments in the Americas and EURAF regions, along with favorable price realization. This was partially offset by unfavorable changes in foreign-currency exchange rates.

Operational Update

Cost of sales rose 6.3% to $337.8 million in the first quarter from $317.7 million in the prior-year quarter. Gross profit climbed 17.2% year over year to $80.2 million. Gross margin came in at 19.2% compared to prior-year quarter’s 17.7%.

Engineering, selling and administrative expenses edged down 1.6% year over year to $59.4 million. Adjusted EBITDA was $29.6 million in the quarter compared with $17.1 million witnessed in the prior-year quarter. Adjusted operating income was $20.8 million in the quarter, which significantly increased from $8 million reported in the year-ago period.  Organic growth in the North American market, favorable mix, global price initiatives and cost-reduction actions were the key drivers for this year-over-year improvement.

Financial Updates

Manitowoc reported cash and cash equivalents of $49 million at the end of the first quarter, down from $140 million recorded at the end of 2018. Long-term debt was $342 million as of Mar 31, 2019, compared with $267 million as of Dec 31, 2018.

The company used $267.3 million of cash in operating activities during the three-month period ended Mar 31, 2019, compared with cash usage of $168.4 million recorded in the comparable period last year.

2019 Guidance

Manitowoc updated its 2019 revenue guidance at $1.90-$1.97 billion and EBITDA guidance at $130-$150 million. The company projects capital expenditures of $35 million for the current year.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates flatlined during the past month.

VGM Scores

At this time, Manitowoc has a poor Growth Score of F, however its Momentum Score is doing a lot better with a B. Charting a somewhat similar path, 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.

Outlook

Manitowoc has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.


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