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JBT posts better earnings, but crop freeze could chill early 2010 sales

by Tara Lachapelle
March 03, 2010


Tara Lachapelle/MEDILL

After unsteady earnings throughout the country's economic downturn, John Bean Technologies Corp. posted a $10.7 million profit for the fourth quarter of 2009. The company hopes for larger projects and more cost cutting tactics in 2010 to make up for a drop in sales due to the crop freeze in Florida.

John Bean Technologies Corp., the Chicago-based food processing equipment manufacturer and airport ground support supplied, posted increased earnings for the fourth quarter on news of weaker full-year results. But the Florida crop freeze could depress company sales for 2010’s first quarter. 

John Bean Technologies Corp., the Chicago-based food processing equipment manufacturer and airport ground support supplier, posted better-than-expected fourth-quarter earnings after the market closed Tuesday.

JBT posted a fourth-quarter profit of $10.7 million, or 37 cents per diluted share, up 6 percent from $10.1 million, or 36 cents per diluted share, from the year-ago quarter. Wall Street predicted flat earnings, but JBT beat expectations by 1 cent. 

The company saw a 5 percent increase in revenue for the fourth quarter ended Dec. 31 to $246 million from $234.5 million.

“We are pleased with the strong finish to 2009,” CEO Charlie Cannon said in the earnings release. “We are seeing signs of increasing order activity; however, the trend toward smaller projects and longer sales cycles continues.  

“It’s the big guys ordering small,” Cannon said in Wednesday’s conference call. “I think the activity level is definitely up from a year ago, and the number of conversations is up. But what is happening is the sales cycle seems to be lengthening.” 

While JBT’s FoodTech company saw a 21 percent increase in fourth quarter revenue, the AeroTech division’s sales declined 18 percent over the prior-year period. According to JBT, AeroTech’s lower revenue is due to a weak demand for its ground support equipment product line from both airline and airfreight industries. FoodTech’s inbound orders declined 5 percent, while AeroTech’s declined 9 percent. 

“JBT’s results are consistent with a company successfully managing through an economic downturn,” Liam Burke, an analyst from Janney Montgomery Scott LLC, said in his report following the earnings release.

Despite strong fourth-quarter results, the smaller orders and stretched out sales cycles brought down JBT’s 2009 full-year revenue and earnings. 

Full-year earnings declined 26 percent to $32.8 million, or $1.15 per diluted share, from $44.2 million, or $1.59 per diluted share in 2008. Earnings beat Wall Street's estimates by 2 cents. Full-year sales fell 18 percent to $846.1 million from $1 billion in 2008.

Cannon said that with credit tightening and capital spending remaining low among JBT’s customers, he expects the small order trend to continue in 2010.

Cannon said the company will defer specific earnings guidance for the year until an early May conference call. “We’ve got some headwinds as we come into the year. We anticipate full year earnings to improve, but the first half looks very much like the first half of 2009,” Cannon said, noting the freeze that has hit Florida’s crops and could bring down sales in JBT’s FoodTech division much like last year.

The company made significant cost cutting efforts in 2009 and said that trend may continue throughout much of this year. “If we hiccup a bit again, we’re going to take further cost reduction actions,” Cannon said.  

The stock closed at $17.23 Wednesday, up 1.17 percent.