QUOTE AND NEWS
Cranes Today  Dec 16  Comment 
by Daniel Searle Manitowoc Crane Care has appointed Australia’s Darwin Crane & Machinery Services (DCMS) to provide after-sales support to its customers in the Northern Territory region.
Market Intelligence Center  Dec 10  Comment 
After Tuesday’s trading in Manitowoc Company Inc. (MTW) MarketIntelligenceCenter.com's patented algorithms uncovered a trade that offers a 11.25% return or 21.50% on an annualized basis (for comparison purposes only), while providing 13.38%...
Market Intelligence Center  Dec 8  Comment 
Manitowoc Company Inc. (MTW) is a good candidate for a covered call at the $18.00 level. The Jun. '15 call at that price should fetch a credit of about $2.85, which means the entire position has a net debit of about $16.35. This trade has 13.02%...
Cranes Today  Nov 28  Comment 
by Daniel Searle Crane manufacturer Manitowoc has appointed Madrid-based Ibergruas as the dealer for its Potain range of tower cranes in Mexico.
Cranes Today  Nov 26  Comment 
by Daniel Searle Samson, which manufactures the synthetic hoist rope used by Manitowoc on its Grove RT770E crane, has completed the expansion of its facility at Ferndale, Washington.
TheStreet.com  Nov 13  Comment 
NEW YORK (TheStreet) -- Citigroup initiated coverage of Manitowoc Co.  with a "neutral" rating and a price target of $24. The multi-industry, capital goods manufacturer, known for its crane business, has solid operational performance but...
Cranes Today  Nov 6  Comment 
A Manitowoc MLC165 heavy-duty crawler crane has been sold into the Mexican market for the first time, to service the country’s growing petrochemical industry.
Motley Fool  Nov 5  Comment 
Did Manitowoc's third-quarter numbers say something you aren't aware of?
Market Intelligence Center  Oct 31  Comment 
With bearish technical indicators and a 3 STARS (out of 5) hold ranking from Standard & Poor’s, Manitowoc Company Inc. (MTW) could be an attractive play for investors according to MarketIntelligenceCenter.com's patented option-trade picking...




 

Manitowoc (NYSE: MTW) manufacturers cranes, food service equipment, and shipping vessels. Manitowoc's value is tied directly to world infrastructure growth, as more heavy construction projects worldwide mean more contracts for MTW's cranes. The sale of the ship building operations in early 2009 and the acquisition of additional food service equipment companies in 2008 may have altered the relative importance of the crane business to some degree.

Ship building, repair, and maintenance, like crane construction, is heavily impacted by economic conditions, including shipping volume moving through the Great Lakes and St. Lawrence Seaway (MTW's 3 shipyards were located on the Great Lakes). The ship building business was sold in early 2009. The food service group, which manufactures commercial refrigerators and ice machines, sells mainly to lodging and restaurant customers, whose sales are largely dependent on discretionary consumer spending. The purchase of additional food service equipment companies in 2008 has increased the limited smoothing effect the Food Services Business has during economic downturns. Although Manitowoc has a diverse portfolio of businesses, all of its divisions are heavily exposed to economic cycles.

Business Overview

Business Segments[1]

After the sale of its shipbuilding business, Manitowoc is divided into two operating segments.

  • Manitowoc Crane Group (60.4% of total revenue): This business segment designs and supports engineered lifts. The Crane Group manufactures crawler cranes, mobile telescopic cranes, tower cranes, and boom trucks. These products are used primarily in infrastructure development (building bridges and roads), energy-related projects, and high-rise construction. After-market services (repairing and maintaining crane equipment) are marketed under the Crane CARE name. After-market sales support revenue when demand for new equipment is weak, and thus, plays an important role in reducing the cyclicality of Manitowoc's profits. Manitowoc's Crane Group is also driving product innovation.[2]
  • Manitowoc Foodservice Group (39.6% of total revenue): This segment markets "cold side" commercial products. These cold side products include industrial ice makers, walk-in refrigerators and freezers, and beverage dispensing products that are used primarily by restaurants, lodging, and convenience stores. Purchases of additional Food Service Equipment businesses in 2008 increased the relative size of the Foods Services Division.[3]

IMAGE:MTW-Segments2009.jpg[1]

Business & Financial Metrics[1]

In 2009, Manitowoc incurred a net loss of $704.2 million on $3.78 billion in total revenues. This represents a 16.0% decrease in total revenues from 2008, when the company generated a net income of $8.1 million. The company's profitability has been decreasing since 2007.

Key Trends and Forces

Global spending on infrastructure directly impacts Manitowoc's sales growth.

Rapid economic growth in Emerging Markets has led to new infrastructure projects (power plants, roads, bridges, high-rise buildings, etc.), and this in turn supports demand for cranes. Merrill Lynch forecasts countries like China mobilizing their vast savings into these projects.[4] More mature markets, such as the United States and countries in Western Europe, are more focused on rebuilding and maintaining their infrastructures, but this still represents a significant amount of spending.

Demand for Commercial and residential construction affects Manitowoc's revenue and income

Expanding growth in economies tends to boost demand for construction of residential and/or commercial properties. An upswing in construction helps Manitowoc sell more equipment, but an economic downturn hurts Manitowoc. Manitowoc's business plan is to increase its geographic distribution of sales and increase after-market service revenue in order to diminish the cyclical swings in profits.[5]

Competition in emerging markets is increasing

In addition to Manitowoc, large companies such as Terex (TEX) and Caterpillar (CAT) have focused attention on expanding operations in these fast growing markets. In addition, local companies in the Emerging Markets are expanding operations. Companies like state-owned China National Building Materials Group manufactures cranes that compete with Manitowoc's equipment.[6] If supply exceeds demand, profits margins for cranes and after-market service contracts will fall.

Demand for bulk commodities and consumer discretionary spending impacts Manitowoc's other business interests

MTW's food service equipment customers are restaurants and hotels. Should consumers dine out less due to a weak economy or less discretionary funds, then Manitowoc's customers will be less inclined to upgrade or buy a new freezer and/or ice maker. However, changing demographics could boost demand for restaurants and travel. Retiring baby boomers will want to eat out and stay in hotels more often, which promotes expansions in restaurants and lodging. In turn, this growth helps increase sales by Manitowoc's food service group.

Competition

Manitowoc's two main businesses are not directly related, and as a result, no single competitor competes with Manitowoc in both business segments. The crane group accounts for the largest portion of MTW's revenue and competes with the large equipment manufacturer, Terex (TEX). This business segment also faces competition from several smaller private firms, like Tadano and Manitex. Manitowoc has earned the #1 global market share for several types of cranes, such as rough terrain and high-capacity lattice boom crawler cranes.[7]

Manitowoc's food service group competes in a $22 billion global market that averages growth of 3-5% per year.[8] Manitowoc has been able to exceed this growth rate by roughly 3% through high replacement sales made to customers.[9]

The marine group of Manitowoc is the largest ship builder and repairer on the Great Lakes.[10] Manitowoc competes primarily with firms that have shipyards that are also located on the Great Lakes and St. Lawrence Seaway system for commercial contracts. Government contracts are less geographically restricted.[11] Competitors include Atlantic Marine, Fraser Shipyards, and Port Weller Drydocks.[12]

References

  1. 1.0 1.1 1.2 MTW 2009 10-K pg. 4  
  2. Manitowoc (NYSE:MTW) Form 10-K, FY 2007, "Market Conditions and Outlook" Page 31-33
  3. Manitowoc (NYSE:MTW) Form 10-K, FY 2007, "Market Conditions and Outlook" Page 31-33
  4. Stanford University Research Site
  5. Manitowoc's Fact Sheet
  6. CNBM Company Website
  7. Manitowoc's Fact Sheet
  8. Manitowoc's Fact Sheet
  9. Manitowoc's Fact Sheet
  10. Manitowoc's Fact Sheet
  11. Manitowoc's Fact Sheet
  12. Manitowoc (NYSE:MTW) Form 10-K, FY 2007, "Competition" Page 10
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