Expectations for Manitowoc’s Q3 Earnings
Manitowoc reports earnings after the bell on Fed Wednesday (so MTW’s earnings might not even matter with Big Ben in the spotlight). Still, I’d like to share that the vibes I got from a few other companies suggests Manitowoc is still running straight and hot and should break to the upside on good earnings. Terex, who also has a decent Crane business, I thought reported decent numbers. Though Terex missed estimates and the stock took a smackdown from $82.9 before earnings to $74.90 on Friday’s close, much of the disappointment came from issues with other business segments, similar to those problems Caterpillar faced. Terex’s Crane business appeared to be one of the strongest segments:
“Net sales for the Terex Cranes segment for the third quarter of 2007 increased $97.6 million, or 22.8%, to $526.6 million versus the third quarter of 2006. Excluding the impact of foreign currency exchange movement, net sales increased approximately 16%. Global demand for the large crawler and mobile telescopic crane products remained at record levels, while the North American market was strong in the rough terrain and larger truck crane product categories. Sales of boom trucks and smaller truck cranes were down as compared to the prior year as a result of softer North American demand for these smaller cranes. This has freed up capacity at the Waverly, Iowa facility to increase production of higher capacity, higher margin rough terrain cranes which remain in high demand. The production issues of a stressed supply chain and capacity limitations in terms of welding and assembly space continued to extend lead times for deliveries and temper net sales growth. Of note, the first twin-boom Terex® Demag CC8800, the world’s largest lattice boom crawler crane with a lifting capacity of 3,200 tons, is scheduled to ship in the fourth quarter for delivery to a customer in the United Arab Emirates.” ~Terex Q3 Earnings Press Release
From United Technologies’ earnings call, we know U.S. commercial construction remains steady for the first half of ‘08. Also, multinational machinery, industrial, oil service, and construction companies are all reporting record business outside of the U.S. All these trends remain favorable for Manitowoc’s business. As with all machinery companies, the risk this quarter may be the high material costs. However, those costs have stabilized for base metals as well as various grades of steel, which should provide for better cost environment going forward (listen to the Precision Castparts conference call on this. PCP is a heavy user of all types of metals). Also, some machinery companies had supply chain issues. Manitowoc has been ramping up production capacity which, combined with its simpler business model with focus mainly on Cranes, hopefully won’t be a problem. These are the things I’m listening for on the call, leave me a note if you have any other positives/negatives to watch for. Hope they don’t run out of Ben Bernanke costumes for Wednesday, no one I’d rather be for Halloween this year!
My previous overview of Manitowoc: Crane Demand “Lifts” Manitowoc’s Potential
** Disclosure: I own positions in MTW, CAT, PCP**
October 30th, 2007 at 11:53 pm
Sickness. All your articles are really professionally done. You should do this more often and perhaps for a living too.
February 27th, 2008 at 2:26 pm
Sir:
I have a client that purchased 2 Terex R/Ts and one crawler last Febuary 07. These machines and were bought brand new with 0 hours one being a 2006 and the other 2007. These machines have extensively rusted out from the undercarriage, fenders, and rusted and pitted boom cylinders while in constant operation in less than 10 months with the contractor wanting them off the job for safety reasons. After repeated efforts to rectify the problems, Terex has refused to supply new fenders, and instucted my client to go out and get his own estimates for repainting (in Jamaica). As to the boom cylinders, I have been in the crane business for 35 years working for Liebherr Crawler Crane, Favelle Favco, and Kroll Tower Cranes and have never seen a rusted and pitted boom cylinder outside of a junk yard. After repeatingly contacting Rodge Jones of the Customer Care and Satisfaction Division his response was, “Obviously, you didn’t take proper care of the machines to lessen the severity.” My client has extensive invoices on replacement parts and, if anything, were over-maintained. How do you prevent an udercarriage rusting through or boom cylinder pitting? Are there any other Terex customers out there experiencing the same situation? Is there a blog of dissatisfied Terex customers? If so please have them contact me at
Please reply to lanecrane@sbcglobal.net. They may also send pictures of their problems as this is heading to court for relief.
Best Regards,
Rick Lane
LaneCrane Consultants Inc., LLC
812-542-1389
502-295-2972
March 9th, 2008 at 7:49 pm
While shopping for my first crane (23 Ton Boom Truck), I fortunately had the
chance to speak to mechanics that serviced both Terex and National boom trucks.
Their disdain for the Terex models was apparent, both in terms of difficulty in servicing
and the frequency of component failure. (The company sold both brands.) Seeing comparable models
side-by-side in the service bays allowed me to observe how much older the 2005 Terex boom trucks looked in contrast to the 2005 National brand. I’m very satisfied with my National 800D boom truck and would recommend it to anyone in the market.