MTW Beat Makes One Look For the King(NYSE: TEX) (NYSE: MTW)

NEW YORK - Manitowoc the ailing Wisconsin County based company reported stronger than expected results today after the close but its strong results may make people turn their eye to stronger rival Terex. The company reported profit of 18 cents a share or $24.4 million and revenue of $935 million down slightly from $949 million from their last quarter but up 16% from Q3 last year. Profit has grown substantially sequentially.

However the results of the company are tempered by its extremely weak balance sheet. The company has tangible equity of -1.6 billion. This is extremely alarming because this negative equity the tangible portion drags down the value of the company's intangible portion. For one if you have more debts than you have assets you're intrinsically worth less. This is fairly simple. The second part is the more debts you have the more risky you are and the higher discount rate must be applied to the stock.

Because of this the information of Manitowoc should be used to analyze the results expected of Terex tomorrow and should be used to buy the Westport, Connecticut based company.

Third-quarter 2011 net sales in the Crane segment were $529.4 million, up 20.7 percent from $438.7 million in the third quarter of 2010, driven primarily by continued growth in the Americas region and greater demand in most emerging markets.

Crane segment operating earnings for the third quarter of 2011 increased to $25.4 million from $16.1 million in the same period last year for MTW. The company's operating margin was 4.8 percent for the third quarter of 2011, up from 3.7 percent in the same period in 2010. The company said there is strong growth in Latin America and India. The company's results were very similar to their Q2 numbers except that crane sales and margins declined slightly and food service revenue and margins increased slightly. The company has such a high debt load that it may continue to find it hard to be profitable.

The best part though for Terex or Manitowoc is their strong guidance. In their previous quarter Manitowoc said the company's crane division would have low double digit percent growth now they say 20 to 25% indicating a strong Q4. The company also increased its margin outlook.

It seems now is the time to buy the Crane companies starting with the letter T. approximately 60% of Manitowoc's company is crane related and 30% of Terex. The food division of Manitowoc is providing profits now but it also caused the company to increase their debt load by some $2.5 billion in 2008 and sell a division in the last year. Manitowoc the ailing company will likely continue to have problems as it suffers under an extremely high debt load in relation to its earnings.