) grew 4% since the company reported an improved third-quarter
2013 earnings on Oct 23. Adjusted earnings of 77 cents per share
increased 24% year over year from 62 cents in the year ago
quarter, mainly due to reduced interest expense and a lower
effective tax rate.
The results also surpassed the Zacks Consensus Estimate of 58
cents. Including special items, Terex's income from continuing
operations surged three folds to 77 cents per share from 27 cents
earned in the prior-year quarter.
Revenues in the quarter declined 0.6% year over year to $1.81
billion, missing the Zacks Consensus Estimate of $1.93 billion.
Cost of goods sold declined 1.4% to $1.42 billion versus $1.44
billion in the year-earlier quarter. Gross profit rose 2.2% year
over year to $387.1 million. Gross margin expanded 70 basis
points to 21%.
Selling, general and administrative expenses remained flat year
over year at $246 million. The company reported an operating
income of $140.9 million, up 7% from $131.9 million in the
Aerial Work Platforms
(AWP) segment's revenues improved 22% year over year to $533
million on the back of recovery in the North American rental
channel, strong Latin American market, as well as early signs of
European replacement cycle. Operating income saw a 39% increase
to $80.7 million from $57.9 million in the prior-year quarter.
segment's revenues declined 17% year over year to $241.7 million.
Results deteriorated due to reduced demand for scrap-handling
equipment and the decline in truck sales in the global market.
The segment reported an operating loss of $4.3 million in the
quarter compared with an operating profit of $8.3 million in the
Revenues from the
segment decreased 12% year over year to $453 million. Operating
income declined to $28.9 million from $51.5 million in the
year-earlier quarter. The segment's performance was affected by
softness in the global crane market and other select products.
Material Handling & Port Solutions
(MHPS), revenues grew 4% year over year to $460.6 million. The
segment reported an operating income of $18.5 million compared
with $17.4 million in the year-ago quarter.
segment's revenues were $147.7 million, down 1.5% year over year
due to weak mineral markets in Australia and South America, and
soft general construction in Europe, partly offset by a stronger
North American market. The segment reported an operating income
of $18.9 million, up 24% from $15.2 million in the year-ago
As of Sep 30, 2013, cash and cash equivalents amounted to $370.6
million versus $678 million as of Dec 31, 2012. Total debt of the
company decreased to $1.8 billion as of Sep 30, 2013 from $2
billion as of Dec 31, 2012.
Cash flow from operating activities remained flat at $135 million
for the nine-month period ended Sep 30, 2013 compared with the
prior-year comparable period. The company generated free cash
flow of $87 million in the quarter.
Backlog for orders to be filled during the next twelve months was
around $1.8 billion as of Sep 30, 2013, a 7% rise from $1.7
billion as of Sep 30, 2012. Strong demand for AWP products
together with large port equipment orders for MHPS led to the
increase. However, weak demand in the cranes segment offset the
Terex trimmed its 2013 earnings per share forecast from the band
of $2.05-$2.25 to $1.90- $2.10. The company also lowered its
sales guidance to $7.3 billion-$7.5 billion from $7.5 billion to
$7.7 billion. The company expects to generate more than $400
million in free cash flow during the year and remains committed
to reducing its debt.
Terex will realize benefits starting in 2014, from its
substantive actions undertaken in the third quarter to further
adjust the cost structure of the MHPS, and Cranes and
Construction segments. In the near term, strong backlog in the
MHPS segment will aid results.
The company will also benefit from recovery in the
construction sector. The company also remains focused on
improving profit through continued attention on pricing and
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Westport, CT-based Terex 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. It
also offers a complete line of financial products and services to
assist in the acquisition of equipment through Terex Financial
Terex retains a short-term Zacks Rank #3 (Hold).
Lonking Holdings Ltd.
) with a Zacks Rank #2 (Buy), is a better option for potential
investors keen on the construction and machinery industry.
Reflecting on the performance of Terex's peers in the third
Astec Industries Inc.
) reported third-quarter 2013 earnings of 28 cents per share, a
3.4% decline from 29 cents in the year-earlier quarter. The
results fell short of the Zacks Consensus Estimate of 37 cents.
Earnings of construction and mining equipment behemoth
) slumped 43% to $1.45 per share and fell short of the Zacks
Consensus Estimate of $1.68.