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Manitowoc (MTW) Reports Wider-Than-Expected Loss in Q1

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The Manitowoc Company, Inc. (MTW - Free Report) reported first-quarter 2020 adjusted loss per share of 18 cents wider than the Zacks Consensus Estimate of a loss of 10 cents per share. The company had reported earnings per share of 8 cents in the prior-year quarter.
 
Including one-time items, the company reported loss per share of 22 cents in the first quarter compared with a loss of 75 cents per share in the prior-year quarter.

Manitowoc’s revenues were down 21% to $329 million from the prior-year quarter figure of $418 million. The top line also lagged the Zacks Consensus Estimate of $352 million.

The Manitowoc Company Inc Price, Consensus and EPS Surprise

Orders in the first quarter were at $375 million, reflecting a decline of 15% on a year-over-year basis. Backlog as of the first quarter end was at $520.9 million.

Operational Update

Cost of sales declined 21% year over year to $266 million in the reported quarter. Gross profit was down 21% year over year to $63 million. Gross margin came in at 19.2%, flat with the prior-year quarter.

Engineering, selling and administrative expenses fell 6% year over year to $56 million. Adjusted EBITDA was $16.3 million in the quarter compared with $29.6 million reported in the prior-year quarter.

Adjusted operating income plunged 65% year over year to $7.2 million in the quarter. Adjusted operating margin came in at 2.2% compared with 5.0% in the prior-year period.
 
Financial Updates

Manitowoc reported cash and cash equivalents of $103.6 million as of Mar 31, 2020, down from the $199 million recorded as of Dec 31, 2018. Long-term debt was $307.3 million as of Mar 31, 2020, compared with $308.4 million as of Dec 31, 2019. Adjusted operating cash flow was around $79 million in the first quarter, compared with cash utilization of $70 million in the year-ago quarter.

2020 Guidance Withdrawn

Manitowoc had withdrawn guidance on Mar 27, 2020 citing the uncertainty related to the COVID-19 pandemic. The company has not provided guidance this time around as well.

The company anticipates weaker demand levels to continue in the near term. Further, supply chain and business disruptions are anticipated to impact the second-quarter and full-year results. Manitowoc has reduced its production levels to align with demand. The company has initiated cost reduction actions, which include cutting down discretionary spending, freezing salary hikes and temporary plant shutdowns.

Share Price Performance

Over the past three months, Manitowoc’s shares have fallen 30.6%, compared with the industry’s decline of 21.1%.

Zacks Rank & Key Picks

Manitowoc currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the Industrial Products sector are Ampco-Pittsburgh Corporation (AP - Free Report) , Silgan Holdings Inc. (SLGN - Free Report) and Energous Corporation (WATT - Free Report) . While Ampco-Pittsburgh and Silgan Holdings sport a Zacks Rank #1 (Strong Buy), Energous Corporation 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 5% in the past three months.

Silgan has a projected earnings growth rate of 11.3% for 2020. The company’s shares have gained 6% over the past three months.

Energous has an estimated earnings growth rate of 17.3% for the ongoing year. The company’s shares have gained 12% in the past three months.

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