Terex Corporation reported second-quarter 2014 adjusted earnings of
$0.76 per share, which increased 18.8% year over year. However, the
company lowered its 2014 earnings guidance to a range of
$2.35-$2.50 per share on weaker-than-expected Crane demand. Terex's
estimates have undergone negative revisions following the guidance
cut. At the end of the quarter, Terex's Book-to-bill was 0.92,
while its backlog declined 7% sequentially to $2.2 billion, mainly
dragged down by the AWP segment. Moreover, Terex's revenues in
developing markets and Australia continue to remain relatively
weak. Hence, we are downgrading our recommendation from neutral to
underperform with a target price of $27.
Terex Corporation (TEX) is a global equipment manufacturer
catering to the construction, infrastructure, and surface mining
industries. The company's manufacturing facilities are located in
the U.S., Canada, Europe, Australia, Asia and South America. Terex
sells its products through a worldwide distribution network. The
company has five reporting segments.
Aerial Work Platforms (AWP) (Approximately 35% of total 2Q14
revenue) This segment designs, manufactures, and markets aerial
work platform equipment, telehandlers, power equipment,
construction trailers and utility equipment.
Materials Handling & Port Solutions (MHPS) (21%): This
segment is involved in the design, manufacturing and marketing of
industrial cranes, including standard cranes, process cranes, rope
and chain hoists, electric motors, light crane systems and crane
components and port equipment.
Cranes (24%): This segment designs, manufactures and markets
mobile telescopic cranes, tower cranes, lattice boom crawler
cranes, truck-mounted cranes and telegraphic container stackers, as
well as related components and replacement parts.
Construction (11%): This segment designs and builds heavy and
compact construction equipment, Road building equipment including
asphalt and concrete equipment, landfill compactors and bridge
Material Processing (MP) (9%): This segment designs and
manufactures materials processing equipment, including crushers,
washing systems, screens, apron feeders, chippers and related
components and replacement parts.
Terex also offers a complete line of financial products and
services to assist in the acquisition of equipment through Terex
Terex Corporation (TEX): Read the Full Research
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