Tower crane demand up in Europe, ChinaThe latest crane sales are a mixed report from Manitowoc Co. Inc.: sales are up over last quarter, but still down from last year.
The Wisconsin-based company produces cranes at its Shady Grove plant and is one of the largest employers in Franklin County. The company on Tuesday released its second quarter financial results.
Manitowoc had crane sales 23 percent higher this quarter than the previous quarter, but 31 percent lower than a year ago. The company sold $425 million in cranes during the three months ending June 30, a shadow of the $1.1 billion sold in the second quarter of 2008.
Manitowoc senior officials on Wednesday forecast "lumpiness" in business during a drawn-out economic recovery.
"The second-quarter crane segment results illustrate the continuing challenges of the current economic environment in which we operate," said Glen E. Tellock, Manitowoc chairman and CEO.
Manitowoc laid off about 750 workers at Shady Grove in early 2009 to trim local employment to 1,100. Manitowoc stock also bottomed out in early 2009 at less than $5 a share. A share sold for more than $40 in early 2008. The stock is currently selling for about $10 a share.
Tellock said Manitowoc Crane remains focused on emerging markets for driving the company''s near- and intermediate-term results.
"Similar to prior quarters, emerging markets such as Asia, Latin America, and the Middle East demonstrated positive signs of improvement, while demand in the developed
economies of North America and Europe continues to be weak," he said. About 40 percent of the company''s crane orders are coming from the emerging markets, according to Eric Etchart, president of the Manitowoc crane group.
The company is seeing increased demand for tower cranes in Europe and China, he said. Tower crane sales were the first to decline more than two years ago.
"We''re seeing better and better times," Etchart said.
Smaller cranes have yet to see the uptick. The demand for larger mobile cranes has slowed in Europe, Etchart said. The demand for truck cranes has changed little in China.
The Shady Grove plant makes mobile, hydraulic cranes.
China is producing larger cranes domestically, and its harder to import cranes, Etchart said. Outside China, Manitowoc continues to hold its market share.
The availability of credit remains an issue for potential crane customers, according to Manitowoc officials. Company management removed a sizable order from the backlog because of "persistent financing challenges in the current credit markets" for the purchase, Tellock said.
Equipment suppliers are carrying less inventory and are holding off on crane purchases, according to senior company officials.
The company''s backlog of crane orders declined 13 percent from the previous quarter.
"While some recent positive indicators suggest a stabilization in certain mature markets, we remain guarded as we move into the second half of 2010." Tellock said. "At the same time, we continue to drive the operational efficiencies, process improvements and cost reduction initiatives we implemented last year, which should provide enhanced profitability as demand strengthens across our business."
