ASTE Astec Industries Inc

Manitowoc Company, Inc. (MTW) reported first-quarter 2013 adjusted earnings from continuing operations of 9 cents per share, compared with the break-even results in the prior-year quarter. The results missed the Zacks Consensus Estimate of 14 cents.

On a reported basis, earnings from continuing operations were 8 cents a share compared with the year-ago quarter’s break-even results.

Operational Update

Total revenues were $898 million in the reported quarter, up 5.4% year over year, led by an increase in the crane segment sales. However, the revenues fell short of the Zacks Consensus Estimate of $921 million.

Cost of sales increased 4.5% to $678 million in the first quarter from $648.6 million in the year-ago quarter. Gross profit improved 8.2% year over year to $220 million. Consequently, gross margin expanded 60 basis points (bps) to 24.5% in the quarter.

Engineering, selling and administrative expenses went up 7.6% year over year to $158 million. Operating income excluding restructuring charges was 52.5 million in the reported quarter.

Segmental Performance

Revenues in the Crane and related products segment increased 7.8% year over year to $547.4 million in the reported quarter, driven by continued growth in the American region, as well as higher demand in emerging markets. This rise was partly offset by weakening European economy. The segment’s operating income rose 46% year over year to $31.3 million in the quarter.

Foodservice Equipment segment revenues were $350.6 million in the quarter compared with $344 million in the prior-year quarter. The improvement was mainly due to sales of new products and growth across all geographies. The segment’s operating income dropped 3.7% year over year to $49.1 million in the first quarter.

Backlog

Backlog in the Crane segment was $776 million as of Mar 31, 2013, versus $756 million as of Dec 31, 2012. Total orders were $569 million for the first quarter, 16% lower than the prior-year quarter.

Financial Update

As of Mar 31, 2013, cash and temporary investments amounted to $104 million versus $76.1 million as of Dec 31, 2012. Long-term debt was $1.87 billion as of Mar 31, 2013, compared with $1.73 billion as of Dec 31, 2012. Debt-to-capitalization ratio inched up to 76% as of Mar 31, 2013, from 75% as of Dec 31, 2012.

Cash flow from operating activities was $106 million in the quarter versus $130 million in the prior-year quarter. Capital expenditure was $21.2 million in the quarter compared with $14.2 million in the year-ago quarter.

Outlook

For full-year 2013, Manitowoc maintains its forecast for crane revenues to grow in a high single-digit, while foodservice revenues are revised to grow in mid single-digits from the previous guidance of low single-digits. The company retains a high single-digit improvement in operating margins in the crane segment and mid-teens gains in the foodservice segment.

Capital expenditure projection also remains at $100 million for the year. The company also reaffirmed the outlook for depreciation and amortization, which will be $115 million for 2013. Interest expenses are expected to be $125 million while debt reduction has been targeted to exceed $200 million.

Our view

Crane demand is expected to increase by a significant margin, aided by the new highway bill and a turnaround in the construction sector. Margins in both the Crane and Foodservice segments are expected to improve in fiscal 2013. However, high debt levels and slowdown in the crane segment’s order rate will be headwinds, moving ahead.

Manitowoc, WI-based Manitowoc is one of the world's leading innovators and manufacturers of commercial foodservice equipment. The company is one of the premier innovators and providers of crawler cranes, tower cranes, and mobile cranes for the heavy construction industry, which are complemented by a slate of industry-leading product support services. Manitowoc currently retains a short-term Zacks Rank #3 (Hold).

Peer Performance

Among Manitowoc’s peers, Astec Industries, Inc. (ASTE) reported first quarter earnings of 57 cents, up 10% from 52 cents earned in the year-ago quarter and was ahead of the Zacks Consensus Estimate of 53 cents. Terex Corp. (TEX) posted adjusted earnings of 23 cents, declined 21% from 29 cents earned in the year-ago quarter, missing the Zacks Consensus Estimate of 28 cents. On the other hand, Caterpillar Inc.’s (CAT) earnings dropped 45% to $1.31 per share, and trailed the Zacks Consensus Estimate of $1.34.

 

 
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