JBT Corp. (NYSE:JBT) has an interesting business. With operations both in the food industry and in various aspects of airport operations, JBT has been able to find long-term success despite facing the challenge of managing two very different businesses. Strength in the aerospace industry more broadly has produced opportunities on the airport side of the business, and even with some tough conditions in various parts of the food industry, JBT has managed to maintain a good balance in its operations.

Coming into Tuesday's first-quarter financial report, JBT investors were prepared for lower earnings even as they anticipate solid revenue gains. That's consistent with what actually happened during the quarter, and JBT found it useful to come up with some more strategies it intends to follow to help bolster its bottom line and deliver the results that investors want to see.

Large-body aircraft with lift equipment accessing a baggage compartment.

Image source: JBT.

JBT deals with margin pressure

JBT's first-quarter results weren't entirely satisfactory in many people's eyes. Revenue jumped 19% to $409.2 million, getting a much bigger boost than investors had expected. Yet adjusted income from continuing operations fell 38% to $11.1 million, and that led to adjusted earnings of $0.34 per share, which fell short of the $0.36 per share consensus forecast among those following the stock.

The primary concern for JBT was the fact that so much of its revenue growth came from extraordinary items. New revenue recognition accounting rules were responsible for 15 percentage points of JBT's top-line gain. Another 3 percentage points came from acquisitions, and 4 percentage points were due to favorable currency impacts. That left a 3% decline in true organic revenue.

From an operating standpoint, JBT faced challenges, especially on the food side of the business. The FoodTech unit saw a 26% rise in revenue, but segment operating margin fell more than a percentage point to 7.1%. JBT specifically called out the margin challenges for FoodTech as a contributing factor to its performance. Yet AeroTech saw some similar issues with revenue rising just 3% and operating margin falling close to 2 percentage points to 7.5%.

Backlog figures were encouraging. AeroTech saw greater growth in total backlog with it rising by more than a quarter. More modest gains at FoodTech put total backlog at $696.6 million, up 11% from year-ago levels. Inbound order activity for AeroTech rose at a faster rate than the corresponding figure for FoodTech as well, with total orders of $442 million across both segments.

CEO Tom Giacomini seemed pleased with where the company is right now. "With record orders and strong market conditions, JBT remains on track to deliver double-digit revenue and pre-restructuring earnings growth in 2018," Giacomini said.

What's next for JBT?

JBT is encouraged by the future. The CEO noted that "while FoodTech margins were pressured in the first quarter, we expect meaningful improvement throughout 2018."

To achieve better results, JBT recorded another restructuring charge. The move comes as an effort to invest $50 million toward taking full advantage of JBT's size as a global player in its industry. In Giacomini's words, "We are re-engineering processes for greater efficiency and flattening our organization to move closer to the customer." The CEO expects margin improvement of more than 2 percentage points by the end of 2019.

Those efforts should show results in the near term. JBT boosted its guidance for the full year, raising its adjusted earnings projections by $0.10 per share to a new range of $3.95 to $4.15 per share. The company sees organic growth of 7% to 8% and acquisitions adding another 2 percentage points to 3 percentage points to top-line gains. For the second quarter, sales should rise 22% to 24% and produce adjusted earnings of $1 to $1.07 per share. Some of those gains will come from new accounting standards.

JBT investors focused on the earnings shortfall, punishing the stock as shares fell 12% in morning trading Wednesday following the Tuesday afternoon announcement. Yet as the company looks for ways to expand opportunities in both of its key businesses, JBT has the potential to put any short-term bumps behind it and bounce back to produce stronger growth.

Dan Caplinger has no position in any of the stocks mentioned. The Motley Fool recommends John Bean Technologies. The Motley Fool has a disclosure policy.