Sales of cranes and related products for the fourth quarter of 2010 improved on third quarter results by 12%, rising from $438.8m to $491.4m. This represents a 2.3% increase on the same period last year.
Fourth quarter operating earnings for the cranes segment in 2010 totalled $30.4m, an 88.8% increase on third quarter earnings of $18.3m and a 66% year on year improvement for the quarter.
Along with a 21.7% increase in the crane segment’s order backlog between September 30, 2010 and December 31, 2010 from $572m to $448m, Manitowoc chairman and CEO Glen Tellock believes this could signify the beginnings of a recovery for crane markets.
“Exceptionally strong order rates toward the end of the fourth quarter drove year-over-year and sequential sales growth for our Crane segment,” said Tellock. “North America and Europe are beginning to show signs of modest recovery, and we’re encouraged by new orders from dealers that are beginning to replenish their inventories.
“Additionally, strong operating margins for the quarter resulted in full-year margins well above those witnessed in previous trough years. While we were encouraged by the increasing demand for our products toward the end of 2010, we do expect potential volatility in orders during 2011 as end markets regain their footing.”
Operating margins for the cranes segment rose from 3.7% in the third quarter of 2010 to 6.2% in the fourth quarter, which represents a year on year increase of 63.2%.
The results also displayed the increasing strength of Manitowoc’s Foodservice segment, which currently accounts for 44.3% of Manitowoc’s total sales.
However, despite improving year on year fourth quarter results for both segments, with Foodservice posting increases of 6.8% and 5.8% increases in sales and operating earnings respectively, the company reported fourth quarter losses of $63.8m.
This was primarily due to losses on debt extinguishment and interest expenses, leading Tellock to be optimistic about Manitowoc’s future.
“We were pleased with the actions taken during the year to diligently manage working capital, amend our credit agreement, and reduce leverage. In combination, these initiatives have strengthened our financial position and provided us with additional flexibility to drive improving performance as we move into 2011.”
Such measures included the sale of its Kysor/Warren heated and chilled food storage business, which allowed the firm to reduce its debt by $1bn.
Manitowoc’s 2010 results show the company has shored up its finances, reducing overall losses by 90% from $704.2m in 2009 to $71.4m
Tellock added: “We enter 2011 as a much stronger organisation. With our Foodservice integration complete and the belief that 2010 was the trough year for Cranes, we view the next 12 months as a transition year for Manitowoc.
“As such, we anticipate year-over-year growth for both of our operating segments for the first time since 2008.”
