JBT (JBT) Up 0.8% Since Last Earnings Report: Can It Continue?
It has been about a month since the last earnings report for John Bean (JBT). Shares have added about 0.8% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is JBT due for a pullback? 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 drivers.
John Bean Q3 Earnings Beat Estimates, Increase Y/Y
John Bean Technologies reported adjusted earnings of $1.11 per share in third-quarter 2023, which came in 16% higher than the prior-year quarter. The figure beat the Zacks Consensus Estimate of 99 cents per share. High order levels, pricing actions and gains from the company’s restructuring actions were instrumental in driving the improved results in the quarter.
On a reported basis, the company’s earnings per share (from continuing operations) were 95 cents compared with the prior-year quarter’s earnings per share of 80 cents.
Revenues of $404 million increased 1.2% from the year-ago quarter. A 3% contribution from acquisitions was offset by a 2% decline in organic revenues. The top-line figure lagged the Zacks Consensus Estimate of $419 million. We had estimated organic growth to be 2.2% and contribution from acquisitions to be 4.3%.
In the reported quarter, the company’s orders (from continuing operations) increased 14% year over year to $398 million. The figure came in lower than our projection of orders of $439 million.
The backlog was $689 million at the end of the third quarter, up 4% year over year. Our projection for the backlog was $716 million.
The cost of sales decreased 1.4% year over year to $260 million in the third quarter. Gross profit was up 6% year over year to $144 million. The gross margin was 35.7% compared with the year-earlier quarter’s figure of 34%.
Selling, general and administrative expenses were up 2.3% year over year to $101.5 million. Adjusted operating profit declined 21% year over year to $43 million from the prior-year quarter’s $55 million. Adjusted operating margin was 10.7% compared with 13.7% in the third quarter of 2022.
In the quarter under review, adjusted EBITDA was around $66 million, reflecting a year-over-year increase of 9%. Adjusted EBITDA margin was 16.4% compared with the year-ago quarter’s 15.2%.
Financial Performance
John Bean reported cash and cash equivalents of $402 million at the end of the third quarter of 2023, a significant increase from $72 million at the end of 2022. The company generated around $96 million in cash from operating activities in the nine-month period ended Sep 30, 2023, compared with $87 million in the prior-year comparable period.
The company’s total debt was $646 million as of Sep 30, 2023, down from $978 million as of Dec 31, 2022.
Guidance for Q4 & 2023
John Bean expects revenue growth in 2023 to be in the range of 4.5% to 5.5%. This suggests revenues of $1,662 million to $1,678 million. JBT had earlier expected revenues to be between $1,670 million and $1,720 million for the year.
Adjusted EBITDA is anticipated to be within $265 million and $271 million for 2023. The previous guidance for adjusted EBITDA was $263-$278 million. Adjusted EBITDA margin will likely be between 16% and 16.25%.
Adjusted earnings per share are now projected to be between $3.95 - $4.10, higher than the previously shared guidance of earnings of $3.80 - $4.05 per share.
For the fourth quarter, revenues are expected to be flat or increase 4% from the fourth quarter of 2022. Adjusted EBITDA will range between $73 million and $79 million. JBT expects adjusted earnings per share to be between $1.25 and $1.40 for fourth-quarter 2023.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
VGM Scores
Currently, JBT has a poor Growth Score of F, however its Momentum Score is doing a lot better with a B. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, JBT has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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John Bean Technologies Corporation (JBT) : Free Stock Analysis Report
