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Why Is The Manitowoc Company (MTW) Down 9.4% Since Last Earnings Report?

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A month has gone by since the last earnings report for The Manitowoc Company, Inc. (MTW - Free Report) . Shares have lost about 9.4% 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 due for a breakout? 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.

Manitowoc Q2 Earnings Miss Estimates, '24 View Down

Manitowoc reported adjusted earnings per share (EPS) of 25 cents in second-quarter 2024, missing the Zacks Consensus Estimate of 58 cents. The company reported an EPS of 75 cents in the year-ago quarter.

Including one-time items, the company reported an EPS of 4 cents in the quarter compared with the prior-year quarter’s 57 cents.

Manitowoc’s revenues moved down 6.8% year over year to $562 million in the quarter under review. The top line missed the Zacks Consensus Estimate of $603 million. Favorable changes in foreign currency translation rates had an impact of $2.7 million on revenues.

Orders in the reported quarter decreased 22.2% year over year to $428 million. The backlog at the end of the quarter was $836 million.

Operational Update

Cost of sales moved down 3.6% year over year to $462 million in the reported quarter. The gross profit was down 18.9% year over year to $100 million. The gross margin was 17.7% in the reported quarter compared with 20.4% in the prior-year quarter.

Engineering, selling and administrative expenses decreased 4.5% year over year to $84 million. Total operating costs and expenses were $87 million in the quarter compared with the $89 million reported last year.

Adjusted operating income was $20.6 million in the quarter, down from $45.5 million in the prior-year quarter. Adjusted EBITDA in the reported quarter was $36 million compared with $60 million in the prior-year quarter. The adjusted EBITDA margin fell to 6.4% from the year-ago quarter’s 10%.

Financial Update

Manitowoc reported cash and cash equivalents of $38 million at the end of the second quarter of 2024, up from $34 million at the 2023 end. The long-term debt was $406 million at the end of the quarter under review, up from $359 million at the 2023 end. The company generated $11 million of cash in operating activities in the second quarter of 2024 against a cash outflow of $17.2 million in the last-year quarter.

Outlook

Manitowoc expects revenues of $2.175-$2.225 billion for 2023, down from the previously stated $2.275-$2.375 billion. Adjusted EBITDA is anticipated between $125 million and $140 million, down from the $150-180 million mentioned earlier. The adjusted EPS is expected between 45 cents and 90 cents, whereas the company previously stated 95 cents to $1.55.

How Have Estimates Been Moving Since Then?

It turns out, estimates revision have trended downward during the past month.

The consensus estimate has shifted -54.17% due to these changes.

VGM Scores

Currently, The Manitowoc Company has a poor Growth Score of F, however its Momentum Score is doing a lot better with a C. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of D. 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 has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.


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