) reported first-quarter 2014 adjusted earnings of 28 cents per
share, up 27% year over year from 22 cents in the year-ago
quarter, falling way short of the Zacks Consensus Estimate of 34
cents. Including one-time items, Terex reported earnings per
share of 28 cents, up 65% from the prior-year quarter's earnings
of 17 cents per share.
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Revenues in the quarter remained flat at $1.65 billion, missing
the Zacks Consensus Estimate of $1.7 billion. Growth in the
Aerial Work Platforms (AWP) and the Materials Handling & Port
Solutions (MHPS) segments led to the overall increase.
Cost of goods sold decreased 1% to $1.32 billion from $1.33
billion in the year-earlier quarter. Gross profit rose 4% year
over year to $333 million. Gross margin expanded 70 basis points
Selling, general and administrative expenses increased 1% year
over year to $258 million. The company reported an operating
income of $75 million compared with $66 million in the year-ago
The Aerial Work Platforms segment's revenues improved 15% year
over year to $585 million. Operating income increased 14% to $82
million from $72 million in the prior-year quarter.
The Construction segment's revenues dipped 7% year over year to
$196 million. The segment reported a loss per share of $5
million, narrower than the year-ago quarter's loss of $14.5
Revenues from the Crane segment decreased 16% year over year to
$394 million. The segment reported an operating loss of $0.2
million, remarkably lower than$32.5 million in the year-earlier
In the Material Handling & Port Solutions segment, revenues
grew 9% year over year to $368 million. The segment reported an
operating loss of $6 million compared with an operating loss of
$29 million in the year-ago quarter.
The Material Processing segment's revenues were $150 million,
down 3% year over year. The segment reported an operating income
of $10.9 million, down 7% from $11.7 million in the year-ago
As of Mar 31, 2014, cash and cash equivalents amounted to $390
million versus $408 million as of Dec 31, 2013. Total debt of the
company remained flat at $2 billion as of Mar 31, 2014 compared
with total debt as of Dec 31, 2013. Cash flow from operating
activities was at $25 million in the quarter compared with $59
million in the prior-year quarter. During the quarter, Terex
purchased shares for approximately $33 million under its
previously authorized share repurchase program.
Backlog of orders to be filled during the next 12 months was
around $2.36 billion as of Mar 31, 2014, a 29.3% sequential
increase and a 10.3% year-over-year increase. Backlog increased
across all segments, particularly led by AWP and Cranes.
Terex expects 2014 earnings per share in the band of $2.50-$2.80.
The company maintained its sales guidance of $7.3-$7.7 billion.
Operating margin is expected to be in the range of 7.5% to 8.5%
in 2014. The guidance reflects the benefits of internal cost
initiatives, capital structure improvements and some growth in
projected net sales, tempered with continued market uncertainty,
particularly in developing markets. Even though the company
expects the global economy to be stronger in 2014, it will still
be modest when compared with historic demand levels.
Terex will realize benefits starting 2014, from its substantive
actions undertaken to adjust the cost structure of the MHPS as
well as Cranes and Construction segments. In the near term,
strong backlog in the MHPS segment will aid results. The AWP
segment is continuing to benefit from strong North American
rental channel demand along with improved performance in Latin
America and Europe. The company will also benefit from recovery
in the construction sector. Even though the Cranes segment had a
disappointing first quarter, recent order trends point toward
improved second-half results.
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
Among Terex's peers,
Astec Industries Inc.
) reported first-quarter 2014 earnings per share of 41 cents, a
28% year-over-year decline from 57 cents in the year-earlier
quarter and also fell short of the Zacks Consensus Estimate of 57
Joy Global Inc.
) reported adjusted earnings of 49 cents per share in the first
quarter of fiscal 2014. The earnings compare unfavorably with
$1.31 per share recorded in the year-ago quarter. Earnings missed
the Zacks Consensus Estimate of 64 cents by 23.4%.
Terex retains a short-term Zacks Rank #4 (Sell). A better-ranked
stock in the same sector is
) with a Zacks Rank #1 (Strong Buy).