John Bean (JBT) Q4 Earnings Beat Estimates, Increase Y/Y
John Bean Technologies Corporation JBT reported adjusted earnings of $1.40 per share in fourth-quarter 2023, which were 24% higher than the year-ago quarter, aided by a strong operational performance and the solid execution of its supply-chain initiatives. The figure beat the Zacks Consensus Estimate of earnings of $1.39.
On a reported basis, the company’s earnings per share (from continuing operations) were $1.64, a 69% improvement from the year-ago quarter’s 97 cents.
Revenues of $445 million increased 1% from the year-ago quarter. The top-line figure beat the Zacks Consensus Estimate of $443 million.
John Bean Technologies Corporation Price, Consensus and EPS Surprise
John Bean Technologies Corporation price-consensus-eps-surprise-chart | John Bean Technologies Corporation Quote
The cost of sales decreased 4.6% year over year to $284 million in the fourth quarter. Gross profit was up 12% year over year to $161 million. The gross margin was 36.2% compared with the year-earlier quarter’s figure of 32.6%.
Selling, general and administrative expenses were up 6% year over year to $104 million. Adjusted operating profit increased 25% year over year to $56.8 million from the year-ago quarter’s $45.3 million. Adjusted operating margin was 12.8% compared with 10.3% in the fourth quarter of 2022.
In the quarter under review, adjusted EBITDA was around $81 million, reflecting a year-over-year increase of 18%. Adjusted EBITDA margin was 18.2% compared with the year-ago quarter’s 15.6%.
Cash Position and Balance Sheet
John Bean reported cash and cash equivalents of $483 million at the end of 2023, a significant increase from $72 million at the end of 2022. The company generated around $74 million in cash from operating activities in 2023 compared with $135 million in the prior year. Free cash flow was $167 million, representing a free cash flow conversion of 129%.
The company’s total debt was $646 million as of Dec 31, 2023, down from $978 million as of Dec 31, 2022.
2023 Performance
JBT reported adjusted earnings per share of $4.10 per share, which were 12% higher than the 2022 figure of $3.67. The bottom line beat the Zacks Consensus Estimate of earnings of $4.07 per share. Including one-time items, earnings per share were $4.02 in 2023 compared with $3.23 in 2022.
Revenues rose 4.7% year over year to $1.66 billion, in-line with the consensus estimate. The improvement was mainly driven by acquisitions.
In 2023, the company’s orders increased 5% year over year to $1.67 billion. The figure came in line with our projection of orders of $1.67 billion.
The backlog was $678 million at the end of 2023, up from $664 million at the end of 2022. Our projection for the backlog was $662 million.
Guidance for 2024
The company expects revenues between $1.75 billion and $1.78 billion for 2024. The midpoint of the range indicates year-over-year growth of 6%. JBT expects mid-single-digit organic top-line growth primarily through recurring revenue initiatives and improving demand for equipment, which includes improvement in the North American poultry market in the second half of 2024.
Income from continuing operations is likely to be between $150 million and $162 million. Adjusted EBITDA is forecasted at $295 - $310 million, indicating year-over-year growth of 11% at the midpoint. EBITDA margin is expected between 17% and 17.5%. JBT had reported adjusted EBITDA margin of 16.4%.
John Bean expects adjusted earnings per share between $5.05 and $5.45 per share in 2024. The midpoint of the range suggests 28% year-over-year growth. Margin improvement will be driven by the advancement of supply chain and manufacturing efficiency initiatives as well as ongoing benefits from JBT’s restructuring efforts.
Update on JBT’s Offer for Marel
On Jan 19, 2024 JBT announced that it made an updated offer to acquire each of the outstanding common stock of Marel hf. (Marel) at €3.60 per share. Initially, in November 2023, John Bean had made the offer at €3.15 per share, which it subsequently increased to €3.40 per share in December.
Headquartered in Iceland, Marel is an international food processing company. It manufactures equipment and provides other services to poultry, meat and fish industries.
The proposed merger will unite two renowned companies with complementary product portfolios, well-known brands, and advanced technology. The combined company, which is expected to be named JBT Marel Corporation, is poised to become a leading and diversified global food and beverage technology solutions provider.
Anticipated benefits of the merger include significant cost synergies exceeding $125 million within three years following the completion of the transaction across areas such as procurement, manufacturing and G&A. JBT Marel is also expected to benefit from additional revenue synergies, given attractive cross-selling, go-to-market effectiveness, scaled innovation and enhanced global customer care capabilities.
Price Performance
John Bean’s shares have dipped 6.4% in the past year against the industry’s 5.6% growth.
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Zacks Rank & Other Stocks to Consider
John Bean currently carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks from the Industrial Products sector are Cadre Holdings, Inc. CDRE, AZZ Inc. AZZ and Applied Industrial Technologies AIT. CDRE and AZZ currently sport a Zacks Rank # 1 (Strong Buy), and AIT carries a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Cadre Holdings’ 2024 earnings is pegged at $1.11 per share. The consensus estimate for 2024 earnings has moved 1% north in the past 60 days and suggests year-over-year growth of 16.7%. The company has a trailing four-quarter average earnings surprise of 33%. CDRE shares have gained 52.5% in the past year.
The consensus estimate for AZZ’s fiscal 2024 earnings is pegged at $4.19 per share. The consensus estimate for 2024 earnings has moved 2% north in the past 60 days. The company has a trailing four-quarter average earnings surprise of 37.6%. AZZ shares have rallied 78.6% in the past year.
Applied Industrial has an average trailing four-quarter earnings surprise of 13.9%. The Zacks Consensus Estimate for AIT’s 2024 earnings is pinned at $9.43 per share, which indicates year-over-year growth of 7.8%. Estimates have been unchanged in the past 60 days. The company’s shares have gained 33.6% in a year.
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