Manitowoc Q4 Profit Surges, But Results Miss View; To Split Into Two Companies

(RTTNews) - Manitowoc Co., Inc. (MTW), a manufacturer of foodservice equipment, cranes and ships, on Thursday reported a 61 percent surge in profit for the fourth quarter from last year despite lower sales. However, results for the quarter missed analysts' expectations.

In a separate statement, Manitowoc said its board of directors has approved a plan to split into two independent, publicly-traded companies by spinning off its food-service business. Shares of the company gained more than 8 percent in extended trades.

Glen Tellock, Manitowoc's chairman and chief executive officer, said, "Macroeconomic headwinds continue to put downward pressure on demand for our products and solutions, which muted enterprise results for the fourth-quarter and full-year 2014. In addition, we failed to realize some opportunities that we expected to come to fruition during the quarter."

The company's net earnings for the fourth quarter were $33.6 million or $0.25 per share, up from $20.9 million or $0.15 per share for the year-ago quarter.

Excluding special items, adjusted earnings from continuing operations for the quarter were $0.27 per share, compared to $0.47 per share in the prior-year quarter. On average, nineteen analysts polled by Thomson Reuters expected the company to earn $0.32 per share for the quarter. Analysts' estimates typically exclude special items.

Net sales for the quarter declined 6 percent to $1.04 billion from $1.10 billion in the year-ago period. Analysts had a consensus revenue estimate of $1.06 billion for the quarter.

Net sales in Cranes decreased 6 percent from the year-ago period to $663.2 million, reflecting the negative impact of foreign currency exchange rates between the Euro and U.S. dollar, higher price discounting, and volume decreases that were most pronounced in the rough-terrain and boom truck product categories.

Meanwhile, foodservice equipment sales declined 6 percent to $374.2 million, driven primarily by fewer new product rollouts and unfavorable foreign exchange rates.

For fiscal 2014, Manitowoc's net income rose to $144.5 million from $141.8 million or $1.05 per share in the prior year, while earnings per share were flat with last year at $1.05 on higher share count.

Adjusted earnings from continuing operations for the year were $1.16 per share, compared to $1.45 per share in the previous year.

Net sales for the year declined 4 percent to $3.87 billion from $4.05 billion in the previous year.

Street expected the company to report earnings of $1.20 per share for the year on revenues of $3.91 billion.

Looking ahead to fiscal 2015, Manitowoc forecasts Crane revenue to decline in the mid single-digit percentage and foodservice revenue to grow in the mid single-digit percentage.

In a separate statement, Manitowoc said its board of directors has approved a plan to pursue a separation of its Cranes and Foodservice businesses into two independent, publicly-traded companies. The company had been under pressure from activist investors to split its businesses.

The company anticipates the separation will be effected through a tax-free spin-off of the Foodservice business, that is expected to be completed in the first quarter of 2016.

In December 2014, activist investor Carl Icahn disclosed that he accumulated a 7.7 percent stake in Manitowoc and planned to seek a separation of the company's Crane and Food service equipment businesses into two distinct companies.

Icahn bought 10.5 million shares for about $146.6 million, making him the third largest investor in Manitowoc, behind Fidelity Management and Relational Investors.

MTW closed Thursday's regular trading at $19.24, up $0.17 or 0.89 percent on a volume of 3.60 million shares. In after-hours, the stock further gained $1.61 or 8.37 percent to $20.85.