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TheStreet Open House

Why Manitowoc (MTW) Stock Is Plunging Today

NEW YORK (TheStreet) -- Shares of Manitowoc Co. (MTW) are down -7.09% to $29.99 after the company reported sales of $850.0 million for the first quarter of 2014, a decrease of -5% compared to sales of $894.6 million in the first quarter of 2013.

The Foodservice segment had a strong quarter with sales increasing by 9.3%, which was offset by the -14.2% decrease in Crane segment sales.

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On a GAAP basis, the company reported a loss of -$8.8 million, or -6 cents per diluted share, in the first quarter versus earnings of $10.4 million, or 8 cents per diluted share, in the first quarter of 2013.

Excluding special items the adjusted earnings from continuing operations was $23.7 million, or 17 cents per diluted share, in the first quarter of 2014, versus adjusted earnings of $14.6 million, or 11 cents per diluted share, in the first quarter of 2013.

The company reaffirmed its guidance for the full year 2014.

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TheStreet Ratings team rates MANITOWOC CO as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate MANITOWOC CO (MTW) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its solid stock price performance, notable return on equity and good cash flow from operations. We feel these strengths outweigh the fact that the company has had sub par growth in net income."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Compared to its closing price of one year ago, MTW's share price has jumped by 70.70%, exceeding the performance of the broader market during that same time frame. Turning to the future, naturally, any stock can fall in a major bear market. However, in almost any other environment, the stock should continue to move higher despite the fact that it has already enjoyed nice gains in the past year.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Machinery industry and the overall market, MANITOWOC CO's return on equity exceeds that of both the industry average and the S&P 500.
  • Net operating cash flow has increased to $270.50 million or 15.99% when compared to the same quarter last year. Despite an increase in cash flow, MANITOWOC CO's cash flow growth rate is still lower than the industry average growth rate of 32.66%.
  • MANITOWOC CO's earnings per share declined by 30.8% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, MANITOWOC CO increased its bottom line by earning $1.14 versus $0.77 in the prior year. This year, the market expects an improvement in earnings ($1.70 versus $1.14).
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 6.1%. Since the same quarter one year prior, revenues slightly dropped by 2.3%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • You can view the full analysis from the report here: MTW Ratings Report
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