Manitowoc's 2008 third quarter crane segment sales totaled US$991 million, an increase of 22% on the third quarter of 2007. Operating earnings for the latest quarter were $139 million, up 24% on the same period last year.
Despite increased material costs, operating margins in the third quarter were 14%, 20 basis points higher than in 2007.
Crane backlog for the quarter stood at $3.3 billion, nearly 26% higher than the previous year, but was down slightly from the second quarter of 2008. This decline reflects slowing demand for tower cranes in Europe, said the company. It was also the result of a delay in opening the 2010 order book until material price forecasts and customer pricing arrangements were finalised.
"Demand for our high-capacity crawler and mobile telescopic cranes remains strong in markets where investment in large infrastructure and power generation projects continues. These markets include the Americas, the Middle East, India, and Asia. Demand has softened in China consistent with the anticipated post-Olympic pause in construction projects," explained Glen Tellock, Manitowoc president and CEO.
"However, the availability and cost of financing in Europe, Russia, and Africa began impacting the demand for tower cranes during the quarter. Accordingly, we have taken prudent measures to maximize the performance of the crane segment during this period of economic turbulence," Tellock added.
These measures include rebalancing factory production schedules, cutting the temporary workforce in some European factories and bringing a range of previously outsourced manufacturing activities in-house. There will also be reductions in selling, general and administrative expenses and increased "lean manufacturing initiatives", said the company.
In other parts of the group, the foodservice segment completed the acquisition of UK company Enodis and in August Manitowoc entered an agreement to divest its shipbuilding business to Fincantieri SpA. The deal will be completed in the fourth quarter.
Overall, group net sales were $1.1 billion, while operating earnings stood at $140.6 million. That amounts to an increase of 19.6% and 19.2%, respectively, compared to the third quarter of 2007.