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Terex's (TEX) Q3 Earnings & Revenues Top Estimates, Down Y/Y

Terex Corporation TEX reported earnings per share of 31 cents in third-quarter 2020, beating the Zacks Consensus Estimate of 4 cents. The company had reported adjusted earnings per share of 82 cents in the prior-year quarter.

Operational Update

Revenues in the July-September quarter declined 25.3% year over year to $766 million. However, the revenue figure beat the Zacks Consensus Estimate of $757 million.

Cost of goods sold went down 24% year over year to $619 million. Gross profit plunged 30.2% year over year to $146.3 million.

Selling, general and administrative expenses dropped 11% year on year to $109.8 million in the September-end quarter. Terex reported an operating profit of $36.5 million compared with the year-ago quarter’s $86.4 million. Operating margin came in at 4.8% compared with the 8.4% witnessed in the year-earlier period.

Terex Corporation Price, Consensus and EPS Surprise

Terex Corporation Price, Consensus and EPS Surprise

Terex Corporation price-consensus-eps-surprise-chart | Terex Corporation Quote

Segmental Performance

The Aerial Work Platforms (AWP) segment generated revenues of $445 million in the third quarter, down 29% from the year-ago quarter. The segment reported an operating profit of $13 million compared with the prior-year quarter’s $46 million.

The Material Processing (MP) segment’s revenues totaled $311 million, reflecting a year-over-year decline of 18.8%. The segment reported an operating income of $40 million, down 31% year over year.

Financial Position

Terex had cash and cash equivalents of $508 million as of Sep 30, 2020, compared with $535 million as of Dec 31, 2019. The company generated $89 million cash in operating activities in the first nine-month period of the current year compared with the $78 million witnessed in the comparable period last year. Long-term debt was $1,167 million as of Sep 30, 2020, compared with $1,169 million as of Dec 31, 2019.

Guidance

Terex expects revenues in the fourth quarter to be similar to the first three quarters of the year, thanks to the current market conditions. The company undertook significant cost-reduction actions in order to align its cost structure with the current customer demand. It will continue being focused on managing its cost and working capital. Terex is expected to deliver solid free cash flow in the fourth quarter.

Price Performance

Terex's shares have appreciated 56.4% over the past six months, outperforming the industry’s growth of 31.7%.


 

Zacks Rank and Stocks to Consider

Terex currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the Industrial Products sector include Pentair plc PNR, Lawson Products, Inc. LAWS and Fortune Brands Home & Security, Inc. FBHS, each carrying a Zacks Rank of 2 (Buy), currently. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Pentair has a projected earnings growth rate of 2% for the current year. Shares of the company have gained 41.7% over the past six months.

Lawson Products has an estimated earnings growth rate of 3.4% for 2020. The company’s shares have rallied 59.8% in the past six months.

Fortune Brands has an expected earnings growth rate of 6.9% for the ongoing year. In the past six months, the stock has surged 105.7%.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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