Terex sees first quarter slide

Terex’s revenues for the first quarter of the year were down -9.6% to US$ 1.50 billion. Its operating income fell -41.1% to US$ 44.2 million, and it made a bottom-line loss from continuing operations of US$ 2.1 million, compared to a profit of US$ 32.6 million a year ago.

Terex chairman & CEO Ron DeFeo said, “Operationally the first quarter was generally in-line with our expectations in most of our businesses, and we are encouraged by our order and backlog trends. However, our overall results were weighed down by lower margins in our AWP segment and an unusually high tax rate.”

All five of Terex’s divisions booked lower revenues in the first quarter of 2015 than in the first three months of 2014. However, it was the Aerial Work Platform (AWP), Construction and Materials Handling & Port Solutions (MHPS) segments where were hardest hit.

Terex AWP, which manufactures and sells products under the Genie brand saw revenues fall -13.3% to US$ 507 million in the first quarter. Operating income almost halved from US$ 82.2 million in Q1 2014, to US$ 43.3 million for the first three months of 2015.

Mr DeFeo said, “Currency exchange rates, an unfavourable product mix of fewer booms and more telehandlers, and higher factory production rates in the prior year first quarter, also negatively impacted the year over year margin comparison. Importantly, our AWP segment exited the first quarter with a meaningfully higher operating margin run rate than its overall margins for the quarter. This, coupled with a strong backlog gives us confidence that AWP will return to more normalized operating margins in the second quarter.”

Elsewhere, Terex Construction’s revenues for the first quarter fell -21.4% to US$ 154 million, with the division’s operating loss similar to the first quarter of 2014 at US$ 4.5 million. Terex MHPS saw a -12.6% decline in revenues to US$ 322 million, and the division’s operating loss narrowed slightly from US$ 6.3 million a year ago to US$ 4.3 million for the first quarter of 2015.

Terex Cranes saw just a -1.7% decline in revenues to US$ 387 million, and the division returned an operating income of US$ 3.6 million for the quarter, compared to a loss of US$ 0.2 million a year ago. Similarly, sales for Terex Materials Processing were down just -2.9% to US$ 146 million, and the division’s operating income was almost unchanged from the first quarter of 2014 at US$ 10.7 million.

“The Company’s overall outlook for 2015 has not changed,” Mr DeFeo added. “We expect strong performance from our AWP segment and improvement from our other segments throughout the remainder of 2015. We reiterate our annual outlook for earnings per share of between $2.00 and $2.30, excluding restructuring and other unusual items, on net sales of between $6.2 billion and $6.6 billion.”