Manitowoc Falls After Cutting Forecasts for 2014Elena Popina
Manitowoc Co., under pressure from activist shareholder Relational Investors LLC to break itself up, fell the most in almost three years after cutting its 2014 forecasts for crane sales and foodservice operating margins.
The Manitowoc, Wisconsin-based company now sees 2014 crane revenue being flat to slightly down, the company said yesterday in a statement. In May it predicted “modest” growth. Margins from the production of commercial food appliances will now be in the mid-teen percentages, down from almost in the high-teens.
The shares fell 13 percent to $26.56 at the close in New York, the biggest decline since August 2011.
Second-quarter earnings and sales were also lower than expected. Profit excluding one-time items was 35 cents a share, missing the 43-cent average of 17 analysts’ estimates compiled by Bloomberg. Sales dropped 2.3 percent to $1.01 billion, trailing the $1.06 billion average estimate.
The company said in June it held several discussions with Relational and will consider the activist fund’s proposals. Relational wants it to spin off the food-service business, responsible for ice makers and freezers, from its industrial business, which makes and services cranes and boom trucks.
Second-quarter net income fell to $46.6 million, or 34 cents a share, from $57.6 million, or 43 cents. The company’s income tax provision more than doubled to $19.2 million in the period a year earlier, Manitowoc said.