Farm and construction machinery stocks are up across the sector, showing improvement on Wednesday and pushing gains further on Thursday. The Manitowoc Company, Inc. (MTW) led the way, posting strong gains after Q3 earnings showed the company surpassed estimated earnings after an otherwise weak year, and the Terex Corporaton (TEX) followed suit.
Battered Manitowoc Gets Good News
It hasn't been a good year for Manitowoc, a multi-industry capital goods manufacturer which primarily designs, manufactures and sells cranes. The stock ended Tuesday selling at $8.65 a share, down 37 precent from its 52 week high of $23.23. However, Tuesday's after-market release of their Q3 earnings provided the spark the stock needed to push forward, finishing the day up 22.08 percent. Manitowoc reported a profit of $23.7 million, or $0.18 per share. While this only beat analyst expectations by a penny, Manitowoc had previously cautioned that 2011 would most likely be a transitional year due to ongoing macroeconomic pressures on the sector. As such, the modest outpacing of predictions proved good enough news to bring investors back to Manitowoc in droves.
The profits were driven largely by the company's cranes segment, which accounted for 58 percent of Manitowoc's revenue. There, a 21 percent increase in sales was driven by solid growth of sales in the Americas and emerging markets. "We are well positioned for the long term as we continue to capitalize on activity driven by large infrastructure and energy projects in cranes and momentum from new product launches in food service," CEO Glen E. Tellock said. The stock continued to be bullish on Thursday, pushing prices up another 13 percent by mid-day, giving Manitowoc stock a nearly 40 percent jump in value since market close Tuesday.
Terex Has Good Wednesday, Great Thursday
Terex Corporation (TEX) finished Wednesday up 7.71 percent after Q3 earnings reports showed a year-over-year revenue increase of 68 percent to $1.8 billion. Terex reported a profit of $36.9 million or $0.33 a share, sharply up from last year's $95.8 million or $0.88 a share loss. Analysts polled by Reuters only expected a $0.21 EPS on $1.6 billion in revenue. The good news led Terex to adjust it's guidance for 2011, anticipating an EPS of between $0.43 and $0.48 on $6.3 to $6.5 billion in revenue, upping August forecasts that only predicted between $5.6 billion and $5.8 billion in revenue.
CEO Ronald DeFeo said "As a result of price increases which we will be instituting, as well as cost saving initiatives across our businesses, we anticipate increases in profitability to outpace our growth in net sales." Terex, which makes specialized equipment ranging from cranes to rock smashers, has suffered through low demand driven by macroeconomic concerns and entered the day with its stock down 64% off its 52-week high. After Thursday's announcement; however, shares shot up over 20 percent. All told, this gives Terex an increase of over 30 percent since the end of Tuesday.
Gains Reflected Industry Wide
Other companies throughout agriculture exhibited similar strength with big gains both Wednesday and Thursday. AGCO Corporation (AGCO) posted a strong Wednesday, their stock finishing up 5.27 percent after Tuesday's quarterly report showed an EPS of $0.87, up 37 percent year-over-year. Those gains were intensified by analysts at Barclays Capital (BCS) rating their price target on the stock from $55 to $58. Thursday proved to be an even bigger day, seeing a nearly 7 percent jump in early trading. The Columbus McKinnon Corporation (CMCO) and Cascade Corporation (CASC) followed suit though on very light trading. Columbus McKinnon posted a gain of 6.27 percent Wednesday and approaching another 6 percent Thursday while Cascade was up 5.36 percent Wednesday and over 8 percent by Thursday afternoon. Joy Global, Inc. (JOYG) finished Wednesday up 2.66 percent and doubled that Thursday, jumping over 5.5 percent early in the session. This follows strong gains on Monday by industry leader Caterpillar, Inc. (CAT), which saw its stock gap up on another strong quarterly earnings report. Up over 5 percent early on Thursday, Caterpillar has added over 10 percent since market close Friday.
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