On Nov 19, we issued an updated research report on The Manitowoc Company, Inc. (NYSE:MTW) . The company is poised to gain from product innovation, growth in orders, focus on cost control and pricing actions. However, input cost inflation, weakness in rough terrain markets and the Middle East market remain headwinds. 
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Let's analyze the factors in detail.
Q3 Earnings: A Mixed Bag, 2018 Guidance Upbeat
Manitowoc reported third-quarter 2018 adjusted earnings per share of 20 cents, slumping 45% year over year. However, revenues increased 13% year over year to $450 million in the quarter, aided by improved crane shipments across all regions.
Manitowoc raised full-year 2018 revenue guidance to $1.80-$1.83 billion from $1.78-$1.85 billion, indicating growth of 15% at the midpoint year over year. The company affirmed 2018 adjusted EBITDA guidance of $105-$115 million.
Manitowoc to Gain from Pricing Actions
Manitowoc continues to execute its strategy to cover cost inflation through pricing actions. Further, the company remains focused on cost controls, reducing headcount, increasing productivity and eliminating waste. It has also been taking aggressive steps to support supply-chain partners to ensure timely delivery of components.
Product Innovation: A Key Strategy
Manitowoc’s focus on innovation will continue to aid it in leading the industry by providing differentiated products that add value to its customers. The company introduced the new 30-ton tractor mount National Crane at the Permian Basin International Oil Show. The response has exceeded expectations and order activity has been robust. The company anticipates good crawler demand in 2019, primarily driven by the new product introduction of MLC 100. Crawler utilization is very high and Manitowoc is gaining shares in the United States.
Strong Order Growth Instill Optimism
Manitowoc's orders were $458 million in third-quarter 2018 — up 13% year over year. In Americas, demand is being led by the commercial construction and energy end markets. In Asia Pacific, growth is being driven by India, Australia, and China. The company also noted overall stable demand in Europe, with moderating demand in Western Europe. Further, backlog at the end of the quarter came in at $700 million, up 50% from the prior-year quarter, providing improved revenue visibility over the remainder of the year.
Weakness in Rough Terrain Markets, Middle East a Concern
Rough terrain markets have turned positive but still remains well below historical highs. Manitowoc does not anticipate a substantial increase in rough terrain markets in 2019. Further, geopolitical uncertainties and market competitions have kept the Middle East market challenging.
Factors Likely to Suppress Margins
Incremental input costs will continue to impact margins in fourth-quarter 2018, primarily due to the imposition of the tariffs on steel imports. Further, supply chain challenges continue to be a headwind. Fluctuating foreign exchange rates are putting pressure on Manitowoc's margins, particularly on the European-produced cranes that it sells in the United States.
Share Price Performance
Shares of Manitowoc have lost around 53% over the past year, compared with the industry’s decline of around 7%.
Zacks Rank & Key Picks
Manitowoc currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the same space include Enersys (NYSE:ENS) , Mobile Mini, Inc. (NASDAQ:MINI) and Cintas Corporation (NASDAQ:CTAS) . While Enersys sports a Zacks Rank #1 (Strong Buy), Mobile Mini and Cintas carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Enersys has a long-term earnings growth rate of 10%. The stock has rallied 28% in a year’s time.
Mobile Mini has a long-term earnings growth rate of 14%. The company’s shares have gained 19% during the past year.
Cintas has a long-term earnings growth rate of 12%. Its shares have gained 24% over the past year.
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Mobile Mini, Inc. (MINI): Free Stock Analysis Report
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The Manitowoc Company, Inc. (MTW): Free Stock Analysis Report
Enersys (ENS): Free Stock Analysis Report
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