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Manitowoc (NYSE:MTW) Posts Q4 Sales In Line With Estimates

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Crane and lifting equipment company Manitowoc (NYSE:MTW) met Wall Street’s revenue expectations in Q4 CY2024, but sales were flat year on year at $596 million. Its non-GAAP profit of $3.70 per share was significantly above analysts’ consensus estimates.

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Manitowoc (MTW) Q4 CY2024 Highlights:

  • Revenue: $596 million vs analyst estimates of $598.3 million (flat year on year, in line)
  • Adjusted EPS: $3.70 vs analyst estimates of $0.12 (significant beat)
  • Adjusted EBITDA: $34.9 million vs analyst estimates of $31.39 million (5.9% margin, 11.2% beat)
  • Operating Margin: 2.7%, up from 1.6% in the same quarter last year
  • Free Cash Flow Margin: 16.7%, up from 3.7% in the same quarter last year
  • Backlog: $650.2 million at quarter end, down 29.1% year on year
  • Market Capitalization: $350.2 million

“Fourth quarter results were in line with our expectations. I thank the Manitowoc team for their hard work, dedication, and resilience in managing through a difficult environment. Our 2024 results highlight the strength of our aftermarket business which generated a record $629.1 million of revenue. Comparing to 2020, the year before the launch of our CRANES+50 strategy, non-new machine sales have increased by over 67%,” said Aaron H. Ravenscroft, President and Chief Executive Officer of The Manitowoc Company, Inc.

Company Overview

Contracted by the United States Navy during WWII, Manitowoc (NYSE:MTW) provides cranes and lifting equipment.

Construction Machinery

Automation that increases efficiencies and connected equipment that collects analyzable data have been trending, creating new sales opportunities for construction machinery companies. On the other hand, construction machinery companies are at the whim of economic cycles. Interest rates, for example, can greatly impact the commercial and residential construction that drives demand for these companies’ offerings.

Sales Growth

Examining a company’s long-term performance can provide clues about its quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Regrettably, Manitowoc’s sales grew at a sluggish 3.5% compounded annual growth rate over the last five years. This fell short of our benchmark for the industrials sector and is a tough starting point for our analysis.

Manitowoc Quarterly Revenue

We at StockStory place the most emphasis on long-term growth, but within industrials, a half-decade historical view may miss cycles, industry trends, or a company capitalizing on catalysts such as a new contract win or a successful product line. Manitowoc’s annualized revenue growth of 3.5% over the last two years aligns with its five-year trend, suggesting its demand was consistently weak. Manitowoc Year-On-Year Revenue Growth

Manitowoc also reports its backlog, or the value of its outstanding orders that have not yet been executed or delivered. Manitowoc’s backlog reached $650.2 million in the latest quarter and averaged 9.6% year-on-year declines over the last two years. Because this number is lower than its revenue growth, we can see the company hasn’t secured enough new orders to maintain its growth rate in the future. Manitowoc Backlog

This quarter, Manitowoc’s $596 million of revenue was flat year on year and in line with Wall Street’s estimates.

Looking ahead, sell-side analysts expect revenue to grow 1.7% over the next 12 months, a slight deceleration versus the last two years. This projection doesn't excite us and implies its products and services will see some demand headwinds.

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Operating Margin

Manitowoc was profitable over the last five years but held back by its large cost base. Its average operating margin of 1.5% was weak for an industrials business. This result isn’t too surprising given its low gross margin as a starting point.

Analyzing the trend in its profitability, Manitowoc’s operating margin might have seen some fluctuations but has generally stayed the same over the last five years, meaning it will take a fundamental shift in the business to change.

Manitowoc Trailing 12-Month Operating Margin (GAAP)

In Q4, Manitowoc generated an operating profit margin of 2.7%, up 1.1 percentage points year on year. The increase was encouraging, and since its operating margin rose more than its gross margin, we can infer it was recently more efficient with expenses such as marketing, R&D, and administrative overhead.

Earnings Per Share

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

Manitowoc’s EPS grew at a spectacular 16% compounded annual growth rate over the last five years, higher than its 3.5% annualized revenue growth. However, we take this with a grain of salt because its operating margin didn’t expand and it didn’t repurchase its shares, meaning the delta came from reduced interest expenses or taxes.

Manitowoc Trailing 12-Month EPS (Non-GAAP)

Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business.

Manitowoc’s two-year annual EPS growth of 93.3% was fantastic and topped its 3.5% two-year revenue growth.

In Q4, Manitowoc reported EPS at $3.70, up from $0.10 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects Manitowoc’s full-year EPS of $4.01 to shrink by 79.4%.

Key Takeaways from Manitowoc’s Q4 Results

We were impressed by how significantly Manitowoc blew past analysts’ EPS expectations this quarter. We were also excited its EBITDA outperformed Wall Street’s estimates by a wide margin. On the other hand, its backlog missed significantly and its revenue was in line with Wall Street’s estimates. Zooming out, we think this was a decent quarter featuring some areas of strength but also some blemishes. The stock traded up 1.7% to $9.97 immediately following the results.

Is Manitowoc an attractive investment opportunity right now? When making that decision, it’s important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here, it’s free.

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