Stock to Avoid: John Bean Technologies - Analyst Blog

Zacks Investment Research downgraded John Bean Technologies Corporation JBT to a Zacks Rank #5 (Strong Sell) on Mar 29, 2014. Going by the Zacks model, companies with a Zacks Rank #5 have strong chances of performing worse than the broader market.

Why the Downgrade?

John Bean Technologies failed to impress its shareholders or the market at large as evidenced from a nearly 3% fall in its share price since the company reported its fourth-quarter 2013 results on Mar 4, 2014. A snapshot of the quarter's results is provided below:

Adjusted earnings per share from continuing operations were 54 cents, down from 64 cents recorded in the year-ago quarter. However, the bottom line came in ahead of the Zacks Consensus Estimate of 44 cents.

Revenues generated in the quarter were $288 million, down 1.6% year over year. The decline was due primarily to a 5.1% fall in revenues from the JBT AeroTech segment, offset partially by a 1.0% increase in revenues from the JBT FoodTech segment. Cost of sales increased 0.3%, while gross margin was down 140 basis points.

For first-quarter 2014, John Bean Technologies expects earnings per share to be slightly above the break-even level but much lower than the 14 cents recorded in the year-ago quarter.
 
Weak results in the fourth quarter as well as a poor guidance for first-quarter 2014 triggered downward revisions in earnings estimates. In the last 30 days, the Zacks Consensus Estimate for John Bean Technologies has decreased 9.5% to $1.43 for 2014 and 16.1% to $1.62 for 2015.

Other Stocks to Consider

John Bean Technologies Corporation has a market capitalization of $876 million. Some better-ranked stocks in the machinery industry include Active Power Inc. ACPW, Lennox International, Inc. LII and Broadwind Energy, Inc. BWEN, all of which carry a Zacks Rank #2 (Buy).