Manitowoc sales down, orders up, outlook flat

01 February 2016

Net sales at Manitowoc Cranes for the fourth quarter of 2015 were down 18.1 percent, to US$543.1 million, against the $663.2 million in the same period a year earlier. Orders in the last quarter of 2015, however, at $424 million, were up 26 % from the figure in the third quarter of 2015.

The USA-headquartered crane manufacturer said the fall in revenue was “largely attributable to continuing weakness in rough terrain cranes and boom trucks due to declining oil prices and its impact across energy-related end markets.” Partially offsetting this was shipments of crawler and tower cranes, the company said.

Crane division operating earnings for the fourth quarter of 2015 were $24.1 million, almost half the $45.3 million of the same period in 2014. It gave an operating margin of 4.4 % for the fourth quarter of 2015 against 6.8 % for the fourth quarter of 2014, and 1.0 % in the third quarter of 2015.

For the full year 2015, crane division revenue was down 19.1 % to $1.9 billion. Operating earnings declined from $163.9 million in 2014 to $64.3 million. Operating margins were 3.4 % for the full year ended 2015 compared to 7.1 % in 2014.

The crane order backlog was $513 million on 31 December 2015, down from the fourth-quarter 2014 backlog of $738 million. Fourth-quarter 2015 orders, however, at $424 million, were 26 % up on the previous quarter.

Barry Pennypacker, Manitowoc Cranes president and chief executive officer, said, “During the quarter we saw pockets of better demand within our all terrain category fuelled by our new five-axle GMK5250L. However, the overall business remains challenged by an uncertain macro-economic environment. That said, in my first month at Manitowoc, I have had an opportunity to meet with many of our employees and customers. What I have found is a solid foundation centred around innovation and aftermarket support. There are, however, a number of areas that I believe need to be addressed to enhance our financial performance and position us to deliver profitable growth in any environment.”

For the whole Manitowoc Company fourth-quarter 2015 sales were $934.8 million, a decrease of 9.9 % from the $1.0 billion in the fourth quarter of 2014. In the full year 2015 sales were $3.4 billion, down 11.6 % from $3.9 billion in 2014.

Kenneth Krueger, Manitowoc chairman and interim chief executive officer, said, “Our Cranes business performed as expected during the fourth quarter. While orders improved sequentially from the third quarter, sales continue to be impacted by tepid customer demand. However, the benefits of cost control actions are beginning to take hold to improve overall profitability.”

Commenting on progress with the separation of the cranes and foodservice businesses to form two companies, Krueger continued, “While we continue to push forward with our spin-off activities, the recent weakness in the credit markets has put pressure on our timeline. However, we continue to target completion of the spin-off of our Foodservice business in the first quarter of 2016.”

Manitowoc Cranes’ outlook, taking into account costs of separating the two companies is for revenue to remain approximately flat with an operating margin around 4 %. Pennypacker said, “The full-year 2016 net sales outlook for Manitowoc Cranes assumes no improvement in the global economic backdrop but modest stabilisation in demand. The full-year 2016 operating margin outlook incorporates the incremental corporate expenses Cranes will assume post-spin, offset by the cost optimisation efforts we will continue to undertake.”

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