NEGITIVE IMPACT ON MARGINS OF STEEL PRICE INCREASES
Is this a major concern or are they able to pass the cost on to their customers. Eventually they will be able to, but does anyone know if there is a major lag time between when they close a deal at a specific price and the actual construction and delivery of the crane. i.e if they make a sale and with the price of steel shooting through the roof in the year/ 18 months between sale and delivery, won't they be forced to eat the increase in the price of steel? I'm dieing to buy in as the demand for the foreseeable future is solid, but Steel is on the verge of going highter than anyone realises?
In the last conference call either the CEO or the CFO in answer to the same question from an analyst that you have asked, he stated that when Manitowoc quotes a sale, they price in a significant increase in the steel price, in addition to some option hedging. Further, he stated that they have not been hurt in the past with this pricing strategy. Their backlog goes out between 1 and 2 years! He also stated that they have never had a cancelation of a major backlog sale since the early 1990's! Good luck to all longs.