Why Is JBT (JBT) Up 2.2% Since Last Earnings Report?
A month has gone by since the last earnings report for John Bean (JBT). Shares have added about 2.2% in that time frame, outperforming 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 Revenues and Earnings Beat Estimates in Q1
John Bean Technologies reported adjusted earnings of 87 cents per share in first-quarter 2022, which beat the Zacks Consensus Estimate of 56 cents. However, the bottom line declined 3% from the prior-year quarter. The company has been witnessing strong demand and improved orders through the quarter but higher material and labor costs negated these gains.
On a reported basis, the company’s earnings per share was 80 cents compared with the prior-year quarter’s 84 cents.
Revenues of $469 million surpassed the Zacks Consensus Estimate of $441 million. The top line improved 12% from the prior-year quarter.
In the reported quarter, the company’s total orders rose 16% year over year to $566 million. Orders in the JBT FoodTech segment increased 7% year over year to a record $412 million. In the JBT AeroTech segment, orders surged 53% to $154 million from the prior-year quarter.
Backlog in the FoodTech segment increased 41% from the year-ago quarter to $691 million as of Mar 31, 2022. The AeroTech segment’s backlog was $411 million at the end of the reported quarter, up 46% year over year. Total backlog at the end of the first quarter of 2022 was a record $1.1 billion, up 43% year over year.
Cost and Margins
Cost of sales increased 16% year over year to $330 million during the first quarter. Gross profit was up 5% year over year to $139 million. Gross margin came in at 29.7% compared with the year-earlier quarter’s 31.9%.
Selling, general and administrative expenses were up 15% year over year to $108 million. Adjusted operating profit declined 20% year over year to $31.1 million. Adjusted operating margin was 6.6% in the quarter compared with the prior-year quarter’s 9.3%. In the quarter under review, adjusted EBITDA was around $53.8 million, reflecting a year-over-year decline of 8%. Adjusted EBITDA margin was 11.5% compared with the year-ago quarter’s 14%.
Segment Performance
JBT FoodTech: Net sales were $356 million compared with $312 million in the prior-year quarter. Adjusted operating profit amounted to $40.4 million compared with the year-ago quarter’s $42 million.
JBT AeroTech: Net sales were $113 million, up 6.5% from the prior-year quarter. The segment’s adjusted operating profit plunged 31% year over year to $6.8 million.
Financial Performance
John Bean reported cash and cash equivalents of around $84.2 million at the end of the first quarter of 2022, up from $78.8 million at the end of 2021. The company generated around $39 million of cash from operating activities in the quarter under review, compared with $86 million in the prior-year quarter.
The company’s total debt was $670 million as of Dec 31, 2021, up from $674 million as of Dec 31, 2021.
Guidance
Revenue growth is projected at 15-18% for the FoodTech segment in 2022. The AeroTech segment’s revenues are expected to increase approximately 18-22% from 2021.
JBT anticipates the ongoing supply chain and labor challenges to persist in 2022. Margins are expected to improve sequentially in the second half. The company expects adjusted earnings per share on the range of $5.00 to $5.30 in 2022.
In the second quarter of 2022, adjusted earnings per share is expected in the band of $1.05-$1.20. JBT expects year-over-year consolidated revenue growth of 15-17% for the quarter.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended upward during the past month.
The consensus estimate has shifted 7.63% due to these changes.
VGM Scores
At this time, JBT has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. 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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