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John Bean (JBT) Beats on Q1 Earnings, Withdraws '20 View

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John Bean Technologies Corporation (JBT - Free Report) reported adjusted earnings of $1.01 per share in first-quarter 2020, surpassing the Zacks Consensus Estimate of 73 cents. The bottom line also improved 31% from 77 cents reported in the prior-year quarter. Further, the figure came above management’s guidance of 75-80 cents. The better-than-expected earnings growth came on the back of higher revenues, favorable mix, and cost control measures.

On a reported basis, the company’s earnings per share came in at 90 cents compared with the prior-year quarter’s 62 cents.

The company’s revenues of $458 million in the reported quarter beat the Zacks Consensus Estimate of $424 million. Also, the top line improved 10% year over year. Organic growth of 3% and acquisition growth of 8% were offset by an unfavorable impact of foreign exchange of 1%.

John Bean Technologies Corporation Price, Consensus and EPS Surprise


Orders in the JBT FoodTech segment increased 2% year on year to $316 million in the reported quarter. Orders in the JBT AeroTech segment totaled $155 million, reflecting year-over-year growth of 1.2%. Backlog in the FoodTech segment declined 7% year over year to $395 million. The AeroTech segment’s backlog came in at $310 million in the reported quarter, down 8% from the prior-year quarter.

Cost and Margins

Cost of sales increased 9% year over year to $315 million in the first quarter of 2020. Gross profit improved 12% year over year to $143 million. Gross margin came in at 31.2% compared with the year-earlier quarter’s 30.6%.

Selling, general and administrative expenses flared up 6% year over year to $97 million. Adjusted operating profit improved 32% year over year to $48.2 million. Adjusted operating margin was 10.5% compared with prior-year quarter’s 8.8%.  In the reported quarter, adjusted EBITDA came in at $65.7 million, up 28% year over year.

Segment Performance

JBT FoodTech: Net sales were up 5% year over year to $310 million. Adjusted operating profit came in at $41 million, up 4% from the prior-year quarter.

JBT AeroTech: Net sales improved 20% year over year to $148 million. The segment reported adjusted operating profit of $18.5 million, up 78% year over year.

Financial Performance

John Bean reported cash and cash equivalents of $75.4 million at the end of first-quarter 2020, up from $39.5 million at the end of fiscal 2019. The company generated around $14 million of cash from operating activities during first-quarter 2020 compared with the $2 million reported in the prior-year quarter. At the end of first-quarter 2020, long-term debt was $734 million, up from $698 million as of Dec 31, 2019.

Guidance

While the company has witnessed steep declines in demand from restaurants in the FoodTech end segment, packaged food, meat and staples in retail have significant demand. Some AeroTech end markets have been severely impacted by a decline in global passenger air travel. Resilience in infrastructure, cargo and military end markets helped offset this impact. All end markets are facing unprecedented challenges of operating in an environment with governmental restrictions and shutdowns. All of these factors have led to constrained spending by customers.

For second-quarter 2020, JBT Technologies anticipates a 10-15% sequential decline in revenues. The FoodTech segment’s revenues are expected to decrease 5%, while the AeroTech segment’s revenues will plunge 30%. While operating results in both segments will benefit from cost reductions, the anticipated revenue decline at AeroTech will lead to significant margin contraction. FoodTech operating margins might remain flat sequentially.

The company has withdrawn full-year 2020 guidance on account of the COVID-19 uncertainties.

Meanwhile, the company is aligning its cost structure with market conditions. This includes a hiring freeze, reductions in executive compensation, incentive compensation, and work hours; temporary leaves and, where necessary, layoffs. It is also cutting down on discretionary spending.

Price Performance
 



John Bean's shares have declined 37.6% in the past year against the industry’s growth of 0.1%.

Zacks Rank & Stocks to Consider

John Bean carries a Zacks Rank #4 (Sell).

Some better-ranked stocks in the Industrial Products sector are Ampco-Pittsburgh Corporation (AP - Free Report) , Silgan Holdings Inc. (SLGN - Free Report) and Intellicheck, Inc. (IDN - Free Report) . While Ampco-Pittsburgh and Silgan Holdings sport a Zacks Rank #1 (Strong Buy), Intellicheck carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Ampco-Pittsburgh has an expected earnings growth rate of 2.70% for the current year. The stock has appreciated 11.7% in a year’s time.

Silgan has a projected earnings growth rate of 11.3% for 2020. The company’s shares have rallied 11.8% over the past year.

Intellicheck has an estimated earnings growth rate of 112.5% for the ongoing year. The company’s shares have gained 60.5% in the past year.

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