Ahead of the Bell: Manitowoc

Manitowoc shares fall on 3Q loss, but analysts say investors should focus on the future

• On 9:23 am EDT, Friday October 30, 2009

HARTFORD, Conn. (AP) -- Shares of Manitowoc Co. Inc. fell in premarket trading, a day after the industrial equipment maker posted a smaller third-quarter loss as it cut costs, increased efficiency and reduced working capital costs.

But some analysts said the results were positive, with one analyst saying investors should pay no heed to the bottom line.

"Ignore the EPS," BMO Capital Markets Charles Brady said in a client note Friday. "Crane orders rebounded and food service margins were strong."

He said Manitowoc paid down $140 million of debt in the third quarter and reaffirmed its full-year debt reduction target of $450 million.

Deutsche Bank analyst Nigel Coe said in a client note he was pleased with the results because the Manitowoc, Wis., manufacturer of cranes and food service equipment outperformed many of his key measurements.

Orders for cranes accelerated from the third to fourth quarters, from $156 million to $246 million, Coe said. That was in the range of his expectations of between $200 million and $250 million.

In addition, Manitowoc's crane business remained profitable with margins of 4.3 percent despite "massive production cuts" and lower than expected volumes, Coe said.

Coe said the company's food service "showed very nice trends" with revenue up 5 percent quarter-over-quarter and margins up 1 percentage point, to 14.7 percent.

"Food Service is the earnings and cash anchor over (the) next 12 months," he said.

Coe also said he is encouraged by "early signs of success" on Manitowoc's integration of its acquisition of Enodis, a U.K.-based cooking equipment supplier it bought in October 2008 for more than $2 billion.

Manitowoc lost $17.7 million, or 14 cents per share, compared with a steeper loss in the year-earlier period of $26.1 million, or 20 cents per share. Excluding one-time items, Manitowoc lost 4 cents per share.

Shares fell 70 cents, or nearly 7 percent, to $9.75 in premarket trading.

Buzz up!