On Jan 17, we upgraded our recommendation on
) from Neutral to Outperform as the estimates were positively
revised following its strong third-quarter earnings results,
initiation of quarterly dividend, announcement of a share buyback
program and sale of its truck business.
Furthermore, expected benefits from replacement demand in the
Aerial Work Platforms (AWP) segment, improvement in Port business
and realization of restructuring benefits that will help results
in the Materials Handling & Port Solutions (MHPS) segment,
also garnered a more positive outlook.
Terex reported third-quarter 2013 adjusted earnings of 77 cents
per share, a 24% improvement year over year, mainly due to
reduced interest expense and a lower effective tax rate. The
results also surpassed the Zacks Consensus Estimate of 58 cents.
At quarter-end, backlog of orders to be filled during the next 12
months was around $1.8 billion, a 7% year-over-year rise driven
by strong demand for AWP products, together with large port
equipment orders for MHPS.
The outlook for Aerial Work Platform segment remains strong on
the back of encouraging replacement demand and equipment rental.
The Materials Handling & Port Solutions segment generated
profit in the third quarter, reversing the losses posted in the
last three quarters.
This was brought about by improved performances in the Port
business as well as the parts and service section. Segment
results are expected to improve, driven by improved performance
and large deliveries (particularly Rotterdam) at the Port
business and realization of restructuring benefits.
COLUMBUS MCKINN (CMCO): Free Stock Analysis
KUBOTA CORP ADR (KUBTY): Get Free Report
TEREX CORP (TEX): Free Stock Analysis Report
ZEBRA TECH CL A (ZBRA): Free Stock Analysis
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Terex has decided to sell its truck business in an effort to
transform itself into a lifting and material handling solutions
company. This divestiture will enable it to focus on cranes,
aerial lifts and telehandlers and is in line with the company's
focus on streamlining its construction business by selling
certain underperforming product lines during the year. The
company is on track with internal cost reduction initiatives in
the Material Handling & Port Solutions and Crane businesses
and expects to realize benefits in 2014 and ahead.
Terex's board of directors has initiated a quarterly dividend of
5 cents per share with a dividend yield of 0.5%. The company also
announced a share repurchase program to buyback up to $200
million through Dec 31, 2015. The share repurchase is expected to
be accretive to earnings in 2014 and 2015.
Other Stocks to Consider
Terex currently holds a Zacks Rank #2 (Buy). Other players in the
industry which look attractive at current levels include
Columbus McKinnon Corp.
Zebra Technologies Corp.
). All of these companies hold a Zacks Rank #1 (Strong Buy).