Manitowoc Co. reduced its 2002 profit forecast as crane sales remained weak from a slowdown in commercial construction.
The maker of cranes and refrigerated vending machines employs about 8,000 people, including 2,375 in Wisconsin, and since July has cut 5 percent of its total work force. The 400 job cuts have occurred mostly in crane businesses, company officials said.
The slowdown comes as the crane business has become a bigger piece of the manufacturing portfolio of Manitowoc Co., which also makes ice and beverage machines and repairs and builds ships.
Manitowoc had been expected to earn $2.23 a share this year, according to the average estimate of four analysts polled by Thomson First Call.
But profit, excluding accounting changes and the cost of combining plants, will be $1.90 to $2.10 a share -- about equal to last year’s profit of $1.99, the company said in a statement.
After the company’s crane segment outperformed the industry during the first two quarters of 2002, sales of high-capacity crawler cranes began to decline in the third quarter that ended Sept. 30, said Terry Growcock, Manitowoc’s chairman and chief executive officer.
Manitowoc officials said they were not prepared to announce further job cuts but added that the company expects to finish a cost-reduction plan by the end of the year that may involve reductions in the work force.
"We are sizing our operations to match the market’s current requirements," Growcock said in a written statement.
Meanwhile, Manitowoc’s refrigerated equipment and ship repair divisions are helping pull the company through the slow period, Carl Laurino, interim chief financial officer said in an interview.
"Our diversified business model is working," he said. "We are going to generate $100 million in cash (this fiscal year) from operations even with the challenges we have in the crane segment."
Earlier this year, Manitowoc acquired Pennsylvania-based crane manufacturer Grove Worldwide for $270 million. The deal was funded through a combination of cash and shares of Manitowoc stock.
With Grove, Manitowoc’s total net sales for the third quarter rose 18 percent to $14.7 million, or 57 cents a share, from $12.4 million, or 51 cents a share. Sales increased 36 percent to $409.9 million from $301 million, helped by the acquisition.
Excluding additional business from Grove, Manitowoc’s crane sales declined 12 percent,
according to company officials.
Crane sales are dropping as construction spending slows, according to the company.
"We anticipate that the slowdown in crane sales will continue into 2003," Laurino said. "We feel very good about our other two business segments."