Manitowoc Earnings Call: Orders Surge Amid Tariff Risks

Manitowoc Company ((MTW)) has held its Q4 earnings call. Read on for the main highlights of the call.

Manitowoc’s latest earnings call struck a cautiously upbeat tone, balancing record activity in higher-margin, less-cyclical businesses with visible macro and policy headwinds. Management emphasized strong order growth, expanding backlog, improved safety and product momentum, while acknowledging tariff uncertainty, a one-off regulatory payment, and regional softness that could weigh on near-term results.

Record Non-New Machine Sales Support Margin Quality

Trailing 12-month non-new machine sales climbed to a record $690 million, up 10% year over year and now a cornerstone of Manitowoc’s strategy. Management highlighted that this mix, with gross margins around 35%, provides a more stable earnings base than traditional new equipment cycles and should help cushion volatility in core crane demand.

Orders Surge and Backlog Builds Multi-Quarter Visibility

Fourth-quarter orders reached $803 million, a 56% year-over-year jump driven by stocking orders in the Americas and better tower crane demand in Europe. Year-end backlog climbed 22% to $794 million, and January orders of about $225 million underscored ongoing momentum that gives the company visibility into production and revenue over the coming quarters.

New Machine Demand Rebounds Across Regions

New crane orders rose 64% year over year in the fourth quarter, with mobile crane orders up 39%, pointing to firmer end markets. Management cited improving trends in Europe and Asia Pacific, suggesting that certain international customers are moving past prior hesitation and selectively refreshing fleets despite broader macro uncertainty.

Revenue Growth and Solid Quarterly Profitability

Quarterly net sales increased 14% year over year to $677 million, reflecting both price and volume support across the portfolio. Adjusted EBITDA came in at $40 million, while adjusted EPS reached $0.32 and GAAP diluted EPS was $0.20, illustrating profitability despite cost inflation, tariffs, and FX headwinds.

Strong Quarter for Cash Generation and Liquidity

Manitowoc generated $78 million of free cash flow in the quarter, aided by targeted working-capital reductions. Total liquidity at year-end stood at $298 million, including a $77 million cash balance, giving the company financial flexibility to fund capex, restructuring, and aftermarket expansion while managing through cyclical swings.

Safety Metrics Hit Best Levels in Company History

Operational discipline showed up in safety performance, with the recordable injury rate falling to 0.94, dipping below 1.0 for the first time. First-aid incidents declined 10% year over year and total recordable injuries dropped to 42 from 91 in 2015, reinforcing management’s message that cultural and process improvements are taking hold across global sites.

Product Launches and Aftermarket Expansion Drive Growth

The company launched 11 new cranes in 2025, including the MCT 2205 topless tower crane, with 19 units already sold, underscoring customer interest in the refreshed lineup. Manitowoc also expanded its field service technician base to more than 500, opened and upgraded locations, broadened aftermarket territories in the U.S. and France, and added an MGX distribution deal across 13 states.

Tariffs and Regulatory Costs Weigh on Free Cash Flow

For the full year, free cash flow was a use of $15 million and operating cash flow totaled $22 million, largely due to about $45 million in payments tied to an EPA matter. Management noted that excluding this one-off impact, free cash flow would have been roughly $30 million, though investors were reminded that such regulatory items can temporarily obscure underlying cash performance.

Tariff Uncertainty Pressures Earnings and Customer Behavior

Tariff-related volatility remained a key theme, with net tariffs causing a $0.13 drag on diluted EPS year over year and contributing to a $0.09 decline in adjusted EPS. Management said the uncertainty is skewing customer order timing, particularly in the U.S., as buyers delay commitments while watching trade policy and pricing pass-throughs.

Americas Market Caution and Flat Rental Rates

U.S. demand patterns were described as complicated by tariffs and customers deferring buying decisions, which is slowing some replacement cycles. Flat rental rates in the region further pressure the economics of fleet renewal, dampening near-term appetite for new equipment even as underlying project pipelines remain broadly supportive.

Seasonal and Timing Headwinds Set Up a Soft Q1

Executives signaled that the first quarter of 2026 is likely to be weaker than the rest of the year, reflecting timing of tariffs, currency effects, and restructuring actions. Benefits from cost programs are expected to ramp as the year progresses, suggesting earnings and cash will be back-half weighted and potentially more volatile in early periods.

Leverage Elevated but Expected to Improve

Net leverage ended the year at 3.15x, with cash at $77 million, levels management characterized as manageable but important to monitor. The company intends to bring leverage below 3.0x as restructuring savings, working-capital discipline, and improved profitability flow through, supported by the current order book and non-new sales base.

Capex Needs and Free Cash Flow Tension

Despite a strong quarter of cash generation, full-year free cash flow reflected the EPA payment and continued investment in capex and the rental fleet. Looking ahead, a sizable 2026 capex plan of $45 million to $50 million underscores ongoing investment requirements, which will continue to influence free cash flow even as earnings are guided higher.

Middle East Project Delays Add Regional Volatility

Management pointed to delays on certain large projects, including data center work in Abu Dhabi, that are progressing more slowly than originally expected. Tightening cash conditions in Saudi Arabia are adding to volatility, though demand in Dubai and other pockets remains resilient, leaving the region a mixed but important contributor.

Margin Mix and FX/Inflation Headwinds

While non-new sales support margin stability, management noted that used units within this category carry somewhat lower margins than other aftermarket offerings. Currency swings and inflation remain earnings headwinds, but the company plans to counter them with pricing, sourcing initiatives, and restructuring aimed at streamlining operations and protecting profitability.

Guidance Signals Constructive 2026 Outlook

For 2026, Manitowoc guided net sales to $2.25 billion to $2.35 billion and adjusted EBITDA to $125 million to $150 million, with free cash flow projected at $40 million to $65 million including capex of $45 million to $50 million. Management expects about $10 million in restructuring savings, continued pricing and sourcing actions to offset tariffs and FX, and aims to reduce net leverage below 3.0x while leveraging its $794 million backlog and strong order trends.

Manitowoc’s call painted a picture of a company using product innovation, aftermarket growth, and restructuring to navigate a choppy macro and policy environment. For investors, the narrative blends solid order and backlog data, improving safety and operational execution, and clear 2026 targets with tangible risks around tariffs, regional demand, and cash flow, making execution over the next year critical to the bull case.