QUOTE AND NEWS
TheStreet.com  Mar 24  Comment 
NEW YORK (TheStreet) -- Manitowoc -- which has been one of the top performers in the U.S. machinery space this year -- had a rough day finishing down 5.2% on the news that Jeffries had downgraded the stock.The Wisconsin-based manufacturer has had...
DailyFinance  Mar 11  Comment 
The Manitowoc Company, Inc. (NYSE: MTW) recently welcomed strong reception of its new cranes and innovative crane designs at ConExpo 2014 in Las Vegas. During the five-day show, which concluded on March 8, Manitowoc introduced...
SeekingAlpha  Mar 8  Comment 
By Stephen Simpson, CFA: Investors definitely want to believe that the crane market is on its way to recovery, as both Terex (TEX) and Manitowoc (MTW) are near 52-week highs. Clearly, there is more to these businesses than cranes, but a quick...
SeekingAlpha  Feb 13  Comment 
By Stephen Simpson, CFA: Amidst the still-shaky non-residential construction recovery, investors have cast strong votes in favor of incoming prosperity for Manitowoc (MTW). This crane and foodservice company is certainly among those to benefit if...
SeekingAlpha  Feb 7  Comment 
By Zacks Investment Research: The Manitowoc Company (MTW) delivered a big bottom-line beat on January 30 as profit margins soared in its "Foodservice" segment. Analysts have revised their estimates significantly higher for both 2014 and 2015...
TheStreet.com  Feb 3  Comment 
NEW YORK (TheStreet) -- UBS lifted its estimates on Manitowoc Company after the heavy machinery manufacturer boosted its numbers through 2015. The investment firm pegs Manitowoc with a $30 price target and "neutral" rating. On Thursday, the...
SeekingAlpha  Jan 31  Comment 
The Manitowoc (MTW) Q4 2013 Earnings Call January 31, 2014 10:00 am ET Executives Steven C. Khail - Director of Investor Relations & Corporate Communications Glen E. Tellock - Chairman, Chief Executive Officer and President Carl J....
StreetInsider.com  Jan 31  Comment 
52-Week High: The Manitowoc Company, Inc. (NYSE: MTW) $29.37. Manitowoc up over 18.6 percent after posting Q4 EPS of $0.47 and revs of $1.1 billion, versus consensus estimates looking for EPS of $0.47 and revs of $1.11 billion. Accuray Inc....
TheStreet.com  Jan 31  Comment 
NEW YORK (TheStreet) -- Manitowoc Company  soared on Friday following fourth-quarter earnings which beat expectations a day earlier. By late afternoon, shares exploded 17.3% to $29.03. MTW data by YCharts After the bell Thursday, the heavy...
TheStreet.com  Jan 30  Comment 
NEW YORK (TheStreet) -- Shares of Manitowoc Company  surged in extended trading following earnings which beat expectations. After the bell, shares gained 9.1% to $27. The heavy machinery manufacturer posted fourth-quarter net income of 47 cents...




 

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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