Manitowoc crane decline outweighs foodservice gain

Manitowoc’s crane segment earnings from continuing operations fell from USD555.6m for the full year 2008 to USD145m in 2009. Net sales from cranes fell from USD3.9bn to USD2.3bn.

During the fourth quarter, overall company sales were down 31.1% from USD1.2bn to USD838.7m year-on-year, with sales in the crane segment falling 49.1%, from USD943.6m to USD480.2m. Crane segment operating earnings for the fourth quarter of 2009 decreased to USD18.3m from USD114.9m in the same period last year.

Conversely, Manitowoc’s foodservice segment saw net sales from continuing operations climb from USD620.1m for the full year 2008 to USD1.5bn in 2009, and earnings up from USD56.8m to USD174.3m. In the fourth quarter, foodservice sales from continuing operations rose from USD273m to USD358.5m, and operating earnings from continuing operations increased from USD3.2m to USD41.5m.

"Although we continue to be faced with a challenging business environment, we are encouraged by recently improving metrics and trends for 2010," said Glen Tellock, Manitowoc's chairman and chief executive officer.

“For 2010, we expect our foodservice segment revenues to improve modestly, and operating margins to continue their solid improvement," Tellock added. "In our crane segment, we expect that the year-over-year percentage decline in revenues will be significantly lower than the 41.2% decline in 2009.

“We also expect crane segment revenues in the first half of 2010 will be significantly lower than the first half of 2009; however, we expect crane segment revenue gains in the second half of 2010 versus the second half of 2009. Additionally, we expect full-year operating margins in our crane segment will track above the 3.5% trough margin that we experienced in 2003.

“Other 2010 financial expectations include capital expenditures of approximately USD50m, depreciation and amortization of approximately USD145m, and debt reduction of at least USD200m."

Crane segment backlog totalled USD573m on December 31, 2009, a decline of 14.1% from the USD667m backlog at September 30, 2009. "The percentage decline in backlog diminished in the fourth quarter as the net positive order flow trend that began in March continued through December," said Tellock.

"The trend in our orders reflects improvement in current demand levels, most notably from Asia, Latin America, Africa, and the Middle East. We believe our strong position in emerging markets, as well as the global restructuring that we have been implementing should enable us to restore crane segment revenue and earnings growth as the market improves."