Manitowoc Company Inc. is trading nearly 14 percent lower during today’s pre-market trading session, falling from yesterday’s closing price of $5.78 to just $5.00 this morning. The company just released its second-quarter financial results, falling short of Wall Street analysts’ revenue forecasts. Manitowoc posted revenue of $457.7 million during the three-month period, while the consensus estimate was calling for revenue of $467.9 million.
The company managed to beat the consensus estimate in regards to earnings, however, posting adjusted earnings per share of four cents. Wall Street analysts, on average, were anticipating Manitowoc to report earnings of three cents per share. In last year’s fiscal second quarter, the company posted earnings of 14 cents per share on $463.98 million in revenue.
Manitowoc, which has its headquarters in the Wisconsin city of the same name, produces crawlers and mobile telescopic cranes. Its stock price has fallen more than 60 percent lower since the beginning of 2016.
Apart from generally disappointing earnings, Manitowoc also lowered its full-year outlook for the remainder of 2016. The company anticipates that revenue will drop by 10 percent to 12 percent, and operating income margins between one percent and two percent. Back in May, the company told shareholders that its expected revenue would be flat and its operating margins would be reported at about four percent.
“As we approach the back half of the year, we expect to see market challenges continue and a similar dynamic in sales with continued strength in Tower cranes more than offset by continued weakness in Mobile cranes,” said Manitowoc’s Chief Executive Officer, Barry Pennybacker. “In spite of the positive energy we experienced at bauma this year, it is clear that our customers remain cautious around spending given the ongoing global macro-economic uncertainty. As a result, we have lowered our full-year 2016 sales and operating margin guidance.”
Mr. Pennybacker added that, during the reported three-month period, the company was weakened by a challenging market climate for a number of reasons – especially with its Mobile crane operations in the Americas. The impact was somewhat offset by strong sales of the company’s Tower cranes.
In related news, Manitowoc announced that it plans on relocating its crawler crane manufacturing facilities from Manitowoc, Wisconsin to Shady Grove, Pennsylvania – in an effort to optimize its manufacturing reach, cut expenses and grow margins. The company anticipates recognizing non-cash charges of about $105 million to $120 million. In total, the relocation – which should be completed midway through next year – is expected to save the company between $25 million and $30 million per year. Manitowoc’s headquarters will remain in Wisconsin.
“After a comprehensive analysis and review of our current manufacturing footprint, coupled with current market conditions, we believe this restructuring initiative will ensure that our business continues to meet and exceed the needs of our customers every day,” added Pennybacker.
