Shares of The Manitowoc Company (MTW -1.17%), one of the leading manufacturers of "lifting solutions" such as tower cranes, mobile hydraulic cranes, and bucket trucks, tumbled 14% through 10 a.m. ET on Thursday after the company reported mixed results for its Q4 2023 sales and earnings last night.
Heading into the quarter, analysts had forecast Manitowoc would earn $0.19 per share (adjusted for one-time items) on sales of nearly $584 million. In fact, Manitowoc beat that sales forecast, with sales coming in just shy of $596 million. Profits, however, were less than half of what Wall Street wanted to see -- just $0.09 per share.
Manitowoc Q4 earnings
And the news gets worse. Like the $0.19 estimate, Manitowoc's $0.09 earnings were of the pro forma variety -- non-GAAP. When calculated according to generally accepted accounting principles (GAAP), Manitowoc actually lost $0.23 per share in Q4.
Furthermore, while quarterly sales beat expectations, they still fell 4% year over year.
This was quite a letdown given that Manitowoc posted nearly 10% sales growth for 2023 as a whole. 2023 was also a generally good year for earnings at the company (Q4 excepted). Manitowoc reversed its 2022 losses to report GAAP profits of $1.09 per share for the year, leading CEO Aaron Ravenscroft to describe the company's overall performance for the year as "strong."
Is Manitowoc stock a sell?
So why are investors selling? The Q4 results are one reason. But guidance is also a sore point. Turning to its 2024 financial forecast, Manitowoc said it has a good backlog of orders to fill and global demand for its mobile cranes remains strong -- but perhaps not as strong as last year.
2024 guidance shows sales growing no more than 6.5% this year, to a maximum of $2.38 billion. Profits will probably decline as well. Manitowoc gave no GAAP estimate for earnings in 2024. But the company's pro forma profit in 2023 was $1.52 per share, and it says pro forma profits in 2024 will range from only $0.95 to $1.55 per share -- implying that profits will much more likely go down than up.
It only makes sense, therefore, that Manitowoc's share price is going down today -- not up -- as well. Even at a lowly 13.5 times earnings, Manitowoc stock is not obviously cheap enough to buy.
