JBT Corp. (JBT) Tops Q2 EPS by 27c, Revenues Beat

JBT Corp. (NYSE: JBT) reported Q2 EPS of $1.01, $0.27 better than the analyst estimate of $0.74. Revenue for the quarter came in at $411.5 million versus the consensus estimate of $396.38 million.

Highlights:

• Expands margins despite contraction in sales
• Strengthens balance sheet with strong cash flow
• Anticipates better orders sequentially but lower sales and earnings in the third quarter of 2020

Second Quarter 2020

• Second quarter 2020 revenue of $412 million declined 17 percent year over year, with a 20 percent decline organically and a 2 percent headwind from foreign exchange translation, somewhat offset by 5 percent growth from acquisitions.
• Operating income in the second quarter of 2020 was $48 million and net income was $33 million. Adjusted EBITDA of $68 million declined 12 percent year-over-year while adjusted EBITDA margin expanded 80 basis points to 16.6 percent.

"JBT demonstrated resiliency amidst the challenges presented by the COVID crisis," said Brian Deck, Interim Chief Executive Officer and Chief Financial Officer. "In the second quarter of 2020, we improved margins despite a decline in revenue, we bolstered our balance sheet with outstanding free cash flow generation, and we benefited from the stability provided by our large and profitable recurring revenue base."

"We swiftly adjusted our cost structure to align with a challenging demand environment, benefiting margins in the second quarter," stated Deck.

Outlook

"While there continues to be much uncertainty in the marketplace resulting from the pandemic, we are encouraged by the quality of our sales funnel and expect a sequential pickup in FoodTech and AeroTech orders in the third quarter of 2020. This increase in levels of customer engagement is expected to result in higher costs in the quarter, compared to second quarter," concluded Deck.

Based on current information available to management, the Company foresees a sequential decline in revenue and operating profit in the third quarter of 2020.

FoodTech revenue is expected to decline 10 - 12 percent sequentially, with margins approximating first quarter 2020 levels reflecting lower volume and a moderate resumption of curtailed marketing spend.

At AeroTech, the Company expects a 6 - 8 percent sequential increase in revenue in the third quarter based on typical seasonality. Margins are expected to improve 75 - 100 basis points sequentially.

Corporate expense is also expected to increase sequentially in the third quarter due to the absence of the adjustment to long-term incentive compensation expense in the second quarter.

In the third quarter of 2020, the Company expects to take restructuring and other charges totaling $8 - $9 million associated with manufacturing capacity rationalizations at FoodTech and AeroTech. This action is expected to generate permanent run rate benefits of $6 - $7 million by the end of 2021. Additionally, the Company expects to incur a $1.5 million discrete tax charge during the quarter in connection with new U.K. tax laws.

For earnings history and earnings-related data on JBT Corp. (JBT) click here.

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