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The Manitowoc Company, Inc. (MTW) Down 7% Since Last Earnings Report: Can It Rebound?

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It has been about a month since the last earnings report for The Manitowoc Company, Inc. (MTW). Shares have lost about 7% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is The Manitowoc Company, Inc. due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

Manitowoc Q1 Earnings Miss Estimates, Revenues Beat

Manitowoc reported adjusted EPS of 3 cents in first-quarter 2022, missing the Zacks Consensus Estimate of 6 cents per share. The bottom line, however, marked a solid improvement from a loss of 6 cents per share in the year-ago quarter.

Including one-time items, the company reported earnings per share of 9 cents in the quarter against the prior-year quarter’s loss of 9 cents per share.

Manitowoc’s revenues rose 29.6% year over year to $459 million in the quarter under review. The top line beat the Zacks Consensus Estimate of $432 million. Unfavorable changes in foreign currency translation rates had an impact of $15.8 million on sales.

Orders in the reported quarter increased 1.7% year over year to $481.5 million. Backlog at the end of the quarter was $1,033.4 million, up 56% from the last-year quarter.

Operational Update

Cost of sales surged 31% year over year to $374 million in the reported quarter. Gross profit moved up 24.3% year over year to $85 million. Gross margin was 18.5% in the reported quarter compared with 19.3% in the prior-year quarter.

Engineering, selling and administrative expenses increased 15% year over year to $66 million. Adjusted operating income was $14 million in the quarter, down 30% from $11 million in the prior-year quarter. Adjusted EBITDA in the reported quarter was $31.2 million compared with $21.1 million in the prior-year quarter. Adjusted EBITDA margin contracted to 6.8% from the year-ago quarter’s 6%.

Financial Updates

Manitowoc reported cash and cash equivalents of $51.6 million at the end of the first quarter of 2022, down from $75.4 million at the 2021-end. Long-term debt was $380.1 million at the end of the quarter under review, down from $399.9 million at the 2021-end. The company generated $5.6 million of cash in operating activities in the first quarter of 2022 compared with $40.8 million in the last-year quarter.

Outlook

Manitowoc now expects results in 2022 to be at the lower end of its guidance. It anticipates downward pressure on margins in the second half compared to its prior expectations. MTW had earlier provided revenue guidance in the range of $2.0 billion to $2.2 billion. Adjusted EBITDA is anticipated between $130 million and $160 million. Adjusted EPS is expected between 65 cents and $1.35.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in fresh estimates.

The consensus estimate has shifted -11.59% due to these changes.

VGM Scores

At this time, The Manitowoc Company, Inc. has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of A. 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. It's no surprise The Manitowoc Company, Inc. has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.


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