Manitowoc (MTW) Q3 Earnings and Revenues Miss Estimates
The Manitowoc Company, Inc. MTW reported third-quarter 2021 earnings of 6 cents, which missed the Zacks Consensus Estimate of 10 cents by margin of 40%. The bottom line declined 40% from the year-ago quarter’s earnings of 10 cents per share. The company witnessed strong order rates and continued positive customer sentiment through the quarter. However, cost inflation and parts shortages impaired the company’s ability to achieve its shipments.
Including one-time items, the company reported a loss per share of 1 cent in the quarter, flat compared with the prior-year quarter.
Manitowoc’s revenues climbed 14% to $405 million from the prior-year quarter figure of $355 million. However, the top line lagged the Zacks Consensus Estimate of $463 million.
Orders in the reported quarter increased 37% year over year to $535 million. Backlog as of the end of the reported quarter was $890.6 million, up 92% from the year-ago quarter’s end.
The Manitowoc Company, Inc. Price, Consensus and EPS Surprise
The Manitowoc Company, Inc. price-consensus-eps-surprise-chart | The Manitowoc Company, Inc. Quote
Operational Update
Cost of sales increased 15% year over year to $335 million in the reported quarter. Gross profit improved 6% year over year to $69 million. Gross margin was 17.1% in the reported quarter compared with 18.3% in the prior-year quarter.
Engineering, selling and administrative expenses increased 21% year over year to $59.7 million. Adjusted operating income was $9.7 million in the quarter, which declined 38% from $15.6 million in the prior-year quarter. Adjusted EBITDA in the reported quarter was $20 million, down 19% from $24.8 million in third-quarter 2020 on higher material and transportation costs, and lower plant productivity. Adjusted EBITDA margin contracted 210 basis points year over year to 4.9% in the quarter under review.
Financial Updates
Manitowoc reported cash and cash equivalents of $222 million as of Sep 30, 2021, up from $128.7 million as of Dec 31, 2020. Long-term debt was $400 million as of Sep 30, 2021, up from $300 million as of Dec 31, 2020. The company generated $68 million of cash in operating activities in first nine-month period of 2021 compared with cash utilization of $70.9 million in the prior-year comparable period.
On Oct 1, 2021, Manitowoc completed the acquisition of the crane business of H&E Equipment Services, Inc. HEES, one of the largest rental equipment companies in the United States, for $130 million. The acquisition expands Manitowoc’s ability to provide rentals, new sales, used sales, aftermarket parts, and service to a variety of end market customers. This is in sync with the company’s intention to grow via four strategic priorities, one of which is focused on buyouts to grow its aftermarket business. Earlier in September, Manitowoc completed the acquisition of all the assets of Aspen Equipment Company, a diversified crane dealer and a leading final-stage, purpose-built work truck upfitter, for approximately $51 million.
Outlook
Manitowoc has been witnessing positive trends in crane demand. It anticipates rising inflation, supply chain shortages, and skilled labor constraints to impact results in the remaining part of the year and in 2022 as well.
Manitowoc expects revenues in the range of $1.725 to $1.775 billion, down from the prior expectation of $1.775 to $1.825 billion in 2021. Adjusted EBITDA is now anticipated between $100 million and $110 million, compared with the prior guidance of $105-$115 million.
Share Price Performance
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Over the past year, Manitowoc’s shares have soared 125.8%, compared with the industry’s rally of 26.8%.
Zacks Rank and Other Stocks to Consider
Manitowoc currently carries a Zacks Rank #1 (Strong Buy).
Some other top-ranked stocks in the Industrial Products sector include Encore Wire Corporation WIRE and Heritage-Crystal Clean, Inc. HCCI. Both of these stocks sport a Zacks Rank #1, at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Encore Wire has an estimated earnings growth rate of 491% for the ongoing fiscal year. The company’s shares have appreciated 184% in the past year.
Heritage-Crystal Clean has a projected earnings growth rate of 553% for the current year. The stock has appreciated around 93% in a year’s time.
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The Manitowoc Company, Inc. (MTW) : Free Stock Analysis Report
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