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Will Manitowoc Company, Inc. (MTW) Earnings Get a Big Lift?

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Manitowoc Company, Inc. (NYSE:MTW) will release its quarterly report on Monday, and even with the sluggishness in the economies of many of the fastest-growing countries in the world, shareholders believe that stock still has a lot of promise. The rapid growth in Manitowoc earnings in recent years is expected to slow for the quarter, but investors still look forward to a rapid acceleration in earnings growth in the years to come.

Manitowoc Company, Inc. (NYSE:MTW)Most of Manitowoc Company, Inc. (NYSE:MTW)’s success has come from its production of cranes, with products ranging from the traditional building-top cranes that you’ve seen atop skyscrapers to specialized mobile telescopic cranes that allow workers to do heavy lifting in rough-terrain environments. But Manitowoc also has a food-service equipment business that diversifies its exposure somewhat from the construction industry. Let’s take an early look at what’s been happening with Manitowoc over the past quarter and what we’re likely to see in its quarterly report.

Stats on Manitowoc

Analyst EPS Estimate $0.35
Change From Year-Ago EPS 9.4%
Revenue Estimate $1.07 billion
Change From Year-Ago Revenue 6.2%
Earnings Beats in Past Four Quarters 2

Source: Yahoo! Finance.

What’s holding Manitowoc earnings growth back?
Analysts have trimmed their views on Manitowoc Company, Inc. (NYSE:MTW) earnings in the past few months, reducing their June-quarter estimates by a nickel per share and their full-year 2013 projections by more than twice that figure. Yet the stock has held up relatively well compared to its peers, rising 12% since late April.

Interestingly, Manitowoc actually started the quarter on the wrong foot, as it disappointed investors with a poor earnings report at the beginning of May. Although its crane segment posted reasonable sales growth of 7.8%, the food-service equipment business saw much slower revenue growth of 2% and actually reported a 3.7% drop in operating income.

The entire construction sector has taken huge hits due to sluggishness in Chinese growth, the continued European financial crisis, and unrest in areas like Brazil. Peer Terex Corporation (NYSE:TEX) had to cut its full-year earnings guidance last month, with its construction and material- and port-handling businesses showing particular weakness. Yet the potential silver lining for Terex was its aerial works platforms division, which saw 21% growth in its most recent quarter. The aerial segment’s success points to strength in the niche that Manitowoc Company, Inc. (NYSE:MTW) shares with Terex.

Moreover, Manitowoc Company, Inc. (NYSE:MTW) has managed to maintain a healthy backlog of orders that show the company’s potential to sustain its long-term growth. With $776 million of outstanding crane orders as of March, the backlog represents about four months’ worth of revenue for the segment, roughly in line with what industry giant Caterpillar Inc. (NYSE:CAT)‘s $20.4 billion in order backlog equates to as a proportion of its much larger total revenue. Yet Manitowoc hasn’t seen Caterpillar’s substantial contraction in sales recently, pointing to the crane-maker’s greater resiliency.

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