JBT (JBT) Up 5.3% Since Last Earnings Report: Can It Continue?

It’s been about a month since John Bean’s (JBT) last earnings report. Shares have risen about 5.3% in that time, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is JBT facing a pullback? Before we dive into how investors and analysts have reacted as of late, let’s take a quick look at the most recent earnings report in order to better understand the important catalysts.

John Bean’s first quarter profit exceeds estimates, grows year over year

John Bean reported first-quarter 2024 adjusted earnings from continuing operations of 85 cents per share, up 39% from the year-ago quarter, reflecting cost savings from its supply chain initiatives and restructuring program. The figure surpassed the Zacks Consensus Estimate for earnings of 82 cents per share.

According to the reporting data, the company’s earnings per share (from continuing operations) amounted to 71 cents, an increase of 34% compared to 53 cents in the same quarter last year.

Revenues of $392 million increased 1% compared to the same quarter last year. Top performers missed the Zacks Consensus Estimate of $397 million.

Cost of sales decreased 1.4% year-over-year to $252 million. Gross profit increased 5.6% year over year to $140 million. Gross margin was 35.8% compared to 34.2% in the previous quarter.

Selling, general and administrative expenses increased 6.2% year-over-year to $110 million. Adjusted operating profit increased 13% to $37 million compared to $32.6 million in the year-ago quarter. Adjusted operating margin was 9.4%, an increase of 100 basis points compared to the first quarter of 2023.

Adjusted EBITDA was approximately $57 million, reflecting 6% year-over-year growth. Adjusted EBITDA margin was 14.6% compared to 14% in the same quarter last year.

The company completed a restructuring program this quarter, incurring a $1 million cost. Its cumulative cost is approximately $18 million. John Bean Technologies realized restructuring savings of approximately $4 million this quarter and is on track to achieve cumulative annual operating cost savings of approximately $18 million.

JBT’s backlog at the end of the first quarter was $664 million, down 2% from the backlog of $678 million at the end of the first quarter of 2023. Orders were down 4% year-over-year to $389 million, reflecting weak markets in North America, including the order schedule for warehouse automation and the continuation of a slower investment profile in the poultry market.

Cash position and balance sheet

John Bean Technologies saw cash and cash equivalents of $479 million at the end of the first quarter, compared to $483 million at the end of 2023. The company generated approximately $10 million in cash from continuing operations, compared to $11 million in the quarter previous year . Free cash flow is an inflow of USD 0.7 million against an outflow of USD 4.5 million in the first quarter of 2023.

The company’s total debt was $647 million as of March 31, 2024, up from $646 million as of December 31, 2023.

The story continues

Guidelines for 2024

The company expects 2024 revenue of $1.735 billion to $1.765 billion. The middle of the range represents an increase of 5% year over year. JBT expects organic growth in the range of 4% to 6%.

Income from continuing operations is likely to be between $142 million and $154 million. Adjusted EBITDA is forecast in the range of $295 million to $310 million, representing year-over-year growth of 11% at the midpoint. EBITDA margin will likely be between 17% and 17.5%. JBT reported an adjusted EBITDA margin of 16.4% for 2023.

John Bean expects 2024 adjusted earnings per share to be between $5.05 and $5.45. The midpoint of the range suggests 28% year-over-year growth. Margins are expected to improve steadily in the coming quarters, reflecting improved market conditions and gains from strategic sourcing activities.

Update on JBT’s pending merger with Marel

On April 4, 2024, JBT and Marel entered into a definitive transaction agreement related to JBT’s previously announced intention to submit a voluntary offer to acquire the issued and outstanding shares of Marel. Both parties conducted confirmatory due diligence. Subject to regulatory procedures, John Bean still expects to complete the transaction by the end of 2024.

The proposed merger will bring together two renowned companies with complementary product portfolios, well-known brands and advanced technology. The combined company, to be called JBT Marel Corporation, is poised to become a leading and diversified global provider of food and beverage technology solutions. The expected benefits of the combination include significant cost synergies in excess of $125 million over three years. JBT Marel is also expected to benefit from additional revenue synergies given attractive cross-selling, go-to-market efficiency, scaled innovation and enhanced global customer service capabilities.

How have estimates changed since then?

It turns out that the review of estimates has been trending upwards over the past month.

VGM results

Right now, JBT has a weak Growth Score of F, but its Momentum Score is doing much better at B. Plotting a somewhat similar path, the stock is given a C grade on the value side, placing it in the middle 20% for this investment strategy.

Overall, the stock has a Total VGM Score of D. If you’re not focused on one strategy, this score should interest you.

Perspectives

Estimates for this company show an upward trend, and the scale of this revision looks promising. Notably, JBT carries a Zacks Rank #3 (Hold). We expect a linear rate of return on the stock over the next few months.

Industry player performance

JBT is part of the Zacks Manufacturing – Thermal Products industry. Over the past month, Zebra Technologies (ZBRA), a company in the same industry, has gained 1.3%. More than a month ago, the company published its results for the quarter ended March 2024.

Zebra reported revenue of $1.18 billion in its most recently reported quarter, representing a year-over-year change of -16.4%. EPS of $2.84 for the same period compared to $3.94 a year ago.

Zebra is expected to report earnings per share of $2.82 for the current quarter, representing a -14.3% change from the prior-year quarter. The Zacks Consensus Estimate has changed +7.7% over the past 30 days.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #1 (Strong Buy) for Zebra. The stock also has a VGM Rating of F.

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