Shares of Manitowoc (MTW 2.26%) fell more than 14% on Friday after the crane manufacturer joined the stampede of industrial companies taking a cautious approach to 2020. The company's fourth-quarter results weren't too bad, but management sees a challenging year ahead.
After markets closed Thursday, Manitowoc reported fourth-quarter adjusted earnings of $0.35 per share on revenue of $463.4 million. The results beat analyst earnings estimates by $0.06 per share but were about $30 million light on revenue.
Revenue was hurt by foreign currency exchange, but the business is holding up well overall. The company generated an EBITDA margin of 6.7% in the quarter, an improvement over the 6% margin in the fourth quarter of 2018.
The news was not all good. Manitowoc's backlog declined 29% in 2019 from a year prior, with weakness especially evident in the company's Americas region. The company said it now expects to generate full-year sales between $1.6 billion and $1.7 billion in 2020, below the $1.83 billion it recorded in 2019 and short of the $1.73 billion analysts had been expecting.
Adjusted EBITDA is also expected to fall to a range of $85 million to $115 million, down from $156 million in 2019.
With the drop, shares of Manitowoc are now down 46% in three years. The company has done its best to stay ahead of a feared industrial recession by cutting costs and streamlining operations, but with uncertainty in China and the oil and gas market remaining weak, there is only so much management can do.
CEO Barry L. Pennypacker said, "Manitowoc has never been in a better position to navigate the market cycle, be it up or down," which is good, because the market is clearly anticipating a down cycle in 2020.