QUOTE AND NEWS
Benzinga  Aug 30  Comment 
On CNBC's Fast Money Halftime Report Final Trade, Jim Lebenthal said that he is a buyer of Target (NYSE: TGT) because the retail is picking up and the stock is cheap. Pete Najarian likes Yahoo (NASDAQ: YHOO). With Alibaba IPO coming, the stock...
Benzinga  Aug 26  Comment 
Below are the top mid-cap farm & construction machinery stocks on the NYSE and the NASDAQ in terms of return on investment. The trailing-twelve-month return on investment at Joy Global (NYSE: JOY) is 14.20%. Joy Global's EPS for the same period...
SeekingAlpha  Aug 8  Comment 
By Stephen Simpson, CFA: With Terex (NYSE:TEX) and Manitowoc (NYSE:MTW) both disappointing the Street this quarter, and showing weak results from their crane businesses, the writing was on the wall for Manitex (NASDAQ:MNTX) and the company did...
SeekingAlpha  Aug 1  Comment 
By Stephen Simpson, CFA: I was concerned about Manitowoc's (NYSE:MTW) valuation last quarter, as well as the inconsistent outlook from Manitowoc and Terex (NYSE:TEX) regarding their crane businesses. Now, with another quarter and lowered guidance...
TheStreet.com  Jul 31  Comment 
Update: Article has been corrected to state that Manitowoc's crane segment revenue would be flat to slightly down for the year. The article previously incorrectly stated that segment revenue would be down during the second half of the year NEW...
newratings.com  Jul 30  Comment 
WASHINGTON (dpa-AFX) - The Manitowoc Company Inc. (MTW) reported a second-quarter net earnings of $46.6 million, or $0.34 per share, compared to $57.6 million, or $0.43 per share, in the comparable quarter last year. Earnings from continuing...
SeekingAlpha  Jul 25  Comment 
ByAbba's Aces: I recently sold Carrizo Oil & Gas Inc. (NASDAQ:CRZO) from my growth portfolio because I felt that I was too "oily" at the time in the portfolio and I wanted to add shares of The Manitowoc Company, Inc. (NYSE:MTW) to the portfolio...
Market Intelligence Center  Jul 25  Comment 
Manitowoc Company Inc. (MTW) presents a trading opportunity that offers a 4.87% return in just 57 days. A covered call on Manitowoc at the $31.00 level expiring on Sep. '14 offers an assigned return rate of 4.87% or 31.19% annualized. This...
Motley Fool  Jul 18  Comment 
This crane giant has been growing nicely and now has an activist looking to unlock even more value.




 

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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