Manitowoc saw 23% a increase of $554.8 million in crane sales in Q2 but profits fell by 81% as materials and steel costs continue to hold the company back.
The company has reacted by raising crane prices by 2%, effective 1 July, to offset the rising material expenses.
The surge in sales is not expected to be matched across 2011 but will still rise by about 10% over 2010. Company executives told analysts that 2011 is a transition year for the company from the sales collapse experienced last year to decidedly higher demand anticipated in 2012.
While the recovery is not expected to benefit the crane manufacturers until later in its cycle, factors such as customer reluctance to purchase equipment because of uncertainty about the US and European economies, the stalemate over extending the US government’s debt limit and its budget deficit were all cited as reasons why the sector will not experience the same jump in sales seen by construction machinery manufacturers such as Caterpillar.
“People have wants; they have needs; and they have the cash to buy some things, but they’re sitting on their hands,” said CEO Glen Tellock during a conference call. “There’s some cautiousness. People don’t know where the economy is going.”
“While we continue to expect growth through the remainder of 2011, the continuing uncertainty in the global economic picture is creating ongoing end market volatility.
“With any transition year, our customer base across both segments remains cautious but increasingly more confident.”
