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Materials and Construction Manitowoc Surges on Upbeat Results
By Scott Eden    02/01/11 - 12:16 PM EST

MILWAUKEE (TheStreet) -- Shares of crane-maker Manitowoc(MTW_), which has struggled mightily as demand for its core construction products evaporated during the recession, surged more than 20% Tuesday after the company gave hope to investors in its fourth-quarter earnings release.

Manitowoc, which also makes industrial-size food-service equipment, has labored to pay down more than $1 billion in debt incurred at the peak of the last boom, when it acquired a British manufacturer of food-processing machinery called Enodis.
"We were pleased with the actions taken during the year to diligently manage working capital, amend our credit agreement, and reduce leverage," Manitowoc CEO Glen Tellock said in a prepared statement.
That leverage wouldn't have been so burdensome if it weren't for an almost total collapse of the U.S. commercial construction industry, upon which Manitowoc depends for sales of its massive cranes.
Though the company gave no specific quantitative guidance for 2011, Tellock said: "We are optimistic about the recovery signs we're seeing, and through continued focus on our initiatives and operating objectives, we are looking forward to continued sales and profitability growth in 2011."

In late-morning trading Tuesday, Manitowoc shares were changing hands at $16.09, up 20%, on volume of nearly 9 million shares. Daily turnover averages about 2 million shares. The company released its results after the closing bell Monday.
The sharp rise may have been aided by short covering. Because of Manitowoc's debt concerns, shorts sellers had taken positions in the stock. As of Jan. 14, shorts held 6.7% of the company's float.
Manitowoc said it was encouraged by an upturn in orders toward the end of the fourth quarter. Tellock said the company's dealers were beginning to "replenish their inventories."
The company expects its crane revenue to show percentage growth in 2011 in the low double digits. In the fourth quarter, the crane unit took in revenue of $491 million, up 2.3% from a year ago. Manitowoc said crane backlog totaled $572 million as of Dec. 31, about 28% more than the end of 2009.
Overall in the fourth quarter, Manitowoc continued to spill red ink, posting a loss of $63.8 million, or 49 cents a share, wider than the year-ago loss of $23.5 million, or 18 cents a share.

Excluding charges and other items, Manitowoc said it would have been in the black, with adjusted earnings of $15 million, or 11 cents a share.

The results surpassed Wall Street expectations. On average, sell-side analysts were calling for adjusted earnings of 4 cents a share.
Revenue in the final period of 2010 rose 4% to $831 million from a year ago, which fell short of the $850 million targeted by Wall Street analysts.

Boenning & Scattergood raises their MTW tgt to $24 from $16 saying with management on today's year-end conference call referring to 2010 as a "trough year" for its crane operation and citing strong advances in orders and significant increases in backlogs, they predict that Manitowoc can "earn the years", i.e., produce profits of $1.00 per share in 2011, $2.00 in 2012 and $3.00 in 2013.

Whoa! What Just Happened to My Stock?

Resist the urge to high-five everyone in the cubicles next to you. Your stock may have just strapped on a rocket pack and taken off for the moon, but smart investors won't celebrate until they know that upward leap was justified. Without a fundamental basis for the bounce, these stocks can quickly make the return trip down.

Is now the time to lock in profits, or is this just the first step toward even higher valuations down the road? Let's examine several stocks that just hit the afterburners, and see whether they're truly headed into orbit.

Making it to the big time
After it posted growth in both the cranes and food-service segments of its business, investors bid up Manitowoc's shares. Although some analysts are concerned that it won't be able to maintain the momentum it's generated, Manitowoc seems to be gaining traction where rival Illinois Tool Works (NYSE: ITW) is slipping. The industrial rival reported profits that fell 19% from the year-ago period, and missed the targets analysts set.

Manitowoc has taken the necessary steps to get its debt load under control and will be returning to profitability. The question remains whether the global economy will support growth for this maker of boats and cranes. China still has lots of potential for MTW, as does Mid-East markets, if political unrest and economic factors don't drag things down too far.

You can watch Manitowoc's progress by adding the stock to your watchlist and having all the news and analysis about it gathered in one place.


Day's Range: 17.32 - 18.39
52wk Range: 8.48 - 18.39
Volume: 11,844,941
Avg Vol (3m): 2,312,780
Market Cap: 2.39B
P/E (ttm): N/A
EPS (ttm): -0.23
Div & Yield: 0.08 (0.60%)


Technicals
Record Volume
Record Price High
Close Above the 13-day EMA
Close Above the 50-day-EMA
Percentage Gainer

Last Price Quote is:
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RS Rating: 95 

The Manitowoc Company to Participate in Barclays Capital Industrial Select Conference

Press Release Source: The Manitowoc Company, Inc. On Wednesday February 2, 2011, 4:22 pm

MANITOWOC, Wis.--(BUSINESS WIRE)-- The Manitowoc Company, Inc. (NYSE:MTW - News) today announced that it will participate in the Barclays Capital Industrial Select Conference, which will be held at the Ritz Carlton Hotel in Miami Beach, FL. Carl J. Laurino, senior vice president and chief financial officer, and Steve Khail, director of investor relations and corporate communications, will present an update on Manitowoc's strategies and growth initiatives on Wednesday, February 9, 2011, at 2:45 pm, Eastern time.


A live audio webcast of Manitowoc's presentation will be available through the company's website at www.manitowoc.com. In addition, the presentation can be accessed through the following link: http://cc.talkpoint.com/barc002/020811a_lp/?entity=5_BONFHR6


About The Manitowoc Company, Inc.

The Manitowoc Company, Inc. is a multi-industry, capital goods manufacturer with nearly 100 manufacturing, distribution, service, and/or office facilities in 26 countries. It is recognized as one of the world's largest providers of lifting equipment for the global construction industry, including lattice-boom cranes, tower cranes, mobile telescopic cranes, and boom trucks. Manitowoc also is one of the world's leading innovators and manufacturers of commercial foodservice equipment serving the ice, beverage, refrigeration, food prep, and cooking needs of restaurants, convenience stores, hotels, healthcare, and institutional applications.


Contact:
The Manitowoc Company, Inc.Steven C. Khail, 920-652-1713Director of Investor Relations & Corporate Communications

Mixed Results for Manitowoc...

Zacks Equity Research, On Tuesday February 1, 2011, 9:15 am EST

Manitowoc Co. Inc. (NYSE: MTW - News) has delivered an adjusted EPS of 11 cents in its fourth quarter ended December 31, 2010, outperforming the Zacks Consensus Estimate of 4 cents. The company also reversed its prior-year adjusted loss per share of 9 cents.

The EPS reported in the quarter excluded special items viz. loss on early extinguishment of debt of 14 cents and allowance for deferred tax asset valuation allowance of 39 cents. The year-ago EPS excludes the loss on early extinguishment of debt of 4 cents, restructuring expense of 1 cent and loss on sale of product lines of 6 cents. Netting these items, the company reported loss per share from continuing operations of 41 cents in the quarter compared with a loss of 19 cents in the year-ago quarter.

Revenues increased 4.1% year over year to notch $830.9 million, missing nevertheless the Zacks Consensus Estimate of $859 million. The year-over-year improvement was propelled by strong performance across the segments.

Cost and Margin Performance 

Cost of sales increased 2% to $635.6 million in the quarter, but based on revenues, improved 160 basis points to 76.5%. Accordingly, gross profit upped 12% year over year to $195 million and gross margin expanded 160 basis points to 23.5%.

Engineering, selling and administrative expenses increased 6% to $132 million in the quarter and, based on revenues, increased 30 basis points year over year. Manitowoc's adjusted operating income increased 50% to $53.7 million with operating margin growing 200 basis points to 6.5%. Including special items, operating income was $52.8 million, a 68% year-over-year increase and operating margin surged 250 basis points to 6.4%.

Segment Performance

The Foodservice segment recorded a revenue growth of 7% to reach $339 million driven by introduction of new products and continued geographic penetration. The segment's operating income increased 6% year over year to $42 million. However, operating margin of 12.4% reflected a 10-basis point contraction hurt by difficult comparables resulting from a major product rollout that began in late 2009 and continued into early 2010.

The Crane segment registered a 2% climb in revenues grossing $491.4 million mostly owing to strong order rates at the end of the quarter. The segment operating income rose a convincing 66% to $30 million and operating margin expanded 240 basis points to 6.2%. As of December 31, 2010, the segment backlog increased 27% due to a solid ramp-up in demand across all end markets and most product lines.

Fiscal 2010 Performance

Manitowoc's adjusted EPS for fiscal 2010 was 15 cents, a 48% drop from the prior year but above the Zacks Consensus Estimate of 8 cents. Fiscal 2010 EPS excluded special items viz. loss on early extinguishment of debt of 22 cents, restructuring expense of 2 cents, deferred tax asset valuation allowances of 39 cents and other items of 2 cents. The previous year's adjusted EPS excluded asset impairment charge of $4.95, loss on early extinguishment of debt of 5 cents, restructuring expense of 20 cents, loss on sale of product lines of 6 cents and other items to the tune of 3 cents.

Including the above mentioned special items, in fiscal 2010, loss from continuing operations per share was 49 cents versus loss per share of $4.97 in fiscal 2009. Fiscal 2010 revenues dropped 13.2% to $3.14 billion and missed the Zacks Consensus Estimate of $3.3 billion.

Financial Position

As of December 31, 2010, Manitowoc had cash and cash equivalents of $86.4 million, down from $115.9 million as of September 30, 2010 and $106.3 million as of December 31, 2009. During the year, the company generated cash flow from operating activities of $205.3 million, down from $344.4 million in the prior year.

As of December 31, 2010, the debt-to-capitalization ratio worsened to 80.6% from 79.2% as of September 30, 2010. Management remains focused on improving its balance sheet and committed to its debt reduction goal of $200 million in fiscal 2011. By virtue of its divestiture of the Kysor/Warren business in January 2011, the company has paid back more than $1 billion in debt.

Fiscal 2011 Outlook

For fiscal 2011, Manitowoc expects the Foodservice segment to post revenue growth in the high single digits and margins in the mid teens. The company expects revenues at Crane to grow in the low double digits accompanied by improving margins.

The company plans capital expenditure of $70 million and depreciation and amortization of $125 million for fiscal 2011. Interest expenses are expected to be $160 million.

Our Take

Manitowoc holds a strong market position in the Cranes business. After suffering  repeated revenue declines ever since the third quarter of 2008, the segment finally posted positive growth in the current quarter.

Though we see significant long-term growth potential in this market, driven by an increase in global energy consumption and the need for infrastructure upgrade in both the developed as well as developing nations, it remains to be seen whether the segment can sustain its growth revival over the short term.

Furthermore, Manitowoc's high debt level remains a point of concern. We currently have a Zacks #3 Rank (short-term Hold recommendation) on the stock.

Manitowoc is a multi-industry, capital goods manufacturer with over 100 manufacturing and service facilities in 26 countries. It is one of the world's largest providers of lifting equipment for the global construction industry.

It is also a leading manufacturer of commercial foodservice equipment serving the ice, beverage, refrigeration, food preparation and cooking needs of restaurants, convenience stores, hotels, health care and institutional applications. Manitowoc competes with Terex Corp. (TEX) and privately held Altec Industries Inc. and American Panel Corporation.