In the third quarter of 2014, Terex Corporation's adjusted earnings
per share (EPS) declined 19% year over year to $0.59. Terex will
continue to benefit from its restructuring programs, debt reduction
and share repurchases. However, Terex lowered its adjusted EPS
guidance to the range of $2.35-$2.50 for 2014 and reiterated net
sales range of $7.3 $7.5 billion. The prospects of decline in AWP
operating profits, coupled with weakness in the crane segment and
weakening backlog creates significant uncertainty regarding 2015
earnings. Moreover, adverse currency fluctuations, commodity price
volatility and competition remain headwinds in the near term.
Considering the positive and negative factors, we are upgrading our
recommendation from underperform to neutral with a target price of
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 32% of total 3Q14
revenue) This segment designs, manufactures, and markets aerial
work platform equipment, telehandlers, power equipment,
construction trailers and utility equipment.
Materials Handling & Port Solutions (MHPS) (25%): 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 (23%): 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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