Manitowoc’s Earnings Call: Growth Amid Tariff Challenges

Manitowoc Company ((MTW)) has held its Q3 earnings call. Read on for the main highlights of the call.

Manitowoc Company recently held its earnings call, revealing a mix of optimism and challenges. The company reported significant growth in revenue, orders, and non-new machine sales, alongside notable improvements in safety and productivity. However, concerns were raised about tariff impacts and market uncertainty in North America, which could pose challenges moving forward.

Significant Revenue and EBITDA Growth

Manitowoc Company reported impressive financial results with $553 million in revenue and an adjusted EBITDA of $34 million, marking a 30% increase year-over-year. This growth highlights the company’s robust financial health and its ability to enhance profitability despite external challenges.

Increased Orders and Backlog

The company experienced a surge in orders, which rose to $491 million from $425 million the previous year. Additionally, the backlog ended at a substantial $667 million, indicating strong future demand and a healthy pipeline of projects.

Record Non-New Machine Sales

Non-new machine sales reached $177 million, a 5% increase year-over-year, and achieved a record $667 million on a trailing 12-month basis. This milestone underscores the company’s successful strategy in the non-new machine segment.

Improvements in Safety and Productivity

Manitowoc made significant strides in safety and productivity, achieving a 36% reduction in the recordable injury rate and a 30% productivity improvement at the Zhangjiagang factory, all while maintaining a flat headcount.

Strong Performance in European Tower Crane Market

The European tower crane market showed strong performance, with orders growing 34% year-over-year, marking the fifth consecutive quarter of improvement. This trend reflects the company’s competitive position in the European market.

Positive Market Developments in Europe and Middle East

Encouraging signs were observed in Europe with increased housing permits and infrastructure investments. Similarly, the Middle East market conditions remained strong, providing a favorable environment for growth.

Tariff Headwinds and Uncertainty

Despite the positive developments, the company faced significant challenges due to tariffs, with an expected gross cost of $44 million for 2025. The uncertainty surrounding future tariff strategies remains a concern.

Challenges in North American Market

The North American market presented challenges due to volatility and uncertainty from tariff impacts and the ‘great trade reset,’ affecting demand for certain products.

Delayed Cash Generation

Working capital improvements were limited, delaying cash generation. The company faces a challenging target of achieving $100 million in free cash flow to meet its guidance.

Forward-Looking Guidance

Looking ahead, Manitowoc Company remains optimistic despite the challenges. The company expects to mitigate 80% to 90% of the tariff costs and continues to focus on improving its adjusted EBITDA margin, which improved to 6%, a 120 basis point increase over the previous year.

In conclusion, Manitowoc Company’s earnings call painted a picture of growth and resilience, tempered by external challenges. The company’s significant revenue and order growth, coupled with productivity improvements, highlight its strong market position. However, tariff-related obstacles and North American market uncertainties remain areas of concern. Investors will be keenly watching how the company navigates these challenges while capitalizing on its growth opportunities.