Terex Announces Second Quarter 2010 Results

Wednesday, 28 July 2010 08:33

Terex Corporation (NYSE: TEX) announced a net loss from continuing operations for the second quarter of 2010 of $13.1 million, or $0.12 per share, compared to a net loss from continuing operations of $99.6 million, or $1.00 per share, for the second quarter of 2009. Contributing to the second quarter 2010 net loss from continuing operations were (i) pre-tax charges of approximately $11 million associated with restructuring programs and manufacturing realignment in certain businesses and (ii) a pre-tax provision of approximately $7 million for expected historical foreign duty and related obligations for certain products. Additionally, the Company recognized in Other Income a pre-tax benefit of approximately $12 million associated with marking to market derivative instruments intended to partially mitigate risks associated with 5.8 million shares of the common stock of Bucyrus International, Inc. acquired in connection with the Mining divestiture.

Net sales for continuing operations were $1,079.9 million in the second quarter of 2010, an increase of 14.0% from $947.3 million in the second quarter of 2009. Excluding the impact of acquisitions, net sales increased approximately 6% from the comparable prior year period.

All results are for continuing operations, unless stated otherwise. Discontinued operations include the Mining, Atlas, Powertrain and Load King businesses. All per share amounts are on a fully diluted basis.

“We have just completed a challenging first half of 2010, but many of our businesses have seen their recent results show improvement off of trough levels experienced during 2009,” commented Ron DeFeo, Terex Chairman and Chief Executive Officer. “We are cautious, but positive, about our prospects for continued improvement. Backlog in three of our four segments indicate slightly improved near-term prospects. Our factories have returned to more regular work schedules and production output. These improving business conditions are the basis for our cautious optimism about the balance of 2010 and lay the foundation for what we feel will be a positive business environment in 2011 for most of our product categories.”

Tom Riordan, Terex President and Chief Operating Officer, commented, “Overall, order activity in most of our product categories increased during the second quarter of 2010 compared with the previous quarter and previous year period. However, as expected, our Cranes segment continued to experience a net sales and backlog decline versus the prior year period. We expect this trend to continue, but moderate during the balance of 2010. A bright spot within the Cranes segment was the improvement in the Terex Port Equipment business. Order inquiries for this business have increased substantially compared to last year and we are seeing the positive impact of restructuring programs take effect.”

Mr. Riordan continued, “The balance of our businesses posted mixed operating results for the second quarter, although with substantial year-over-year improvements. Performance in the Materials Processing (MP) segment has improved, posting a profit in the second quarter. Our Aerial Work Platforms (AWP) results continued to reflect soft, but improving, demand from the rental channel.

Increased production schedules and a fuller factory workload bolstered operating performance in the period to approach break-even, despite revenue approximately 69% below prior peak levels.

Construction segment operating losses were sharply reduced, mainly reflecting benefits from cost savings initiatives implemented throughout 2009, increasing demand for compact construction equipment and improved operating performances of our material handler and off-highway truck businesses. For the remainder of the year, we continue to expect non-residential end-market softness in North America and Europe and strength in developing markets. We believe the opportunity for growth exists and our product development, financial services and sales teams are pursuing initiatives intended to increase our market share.”

Mr. DeFeo added, “Operationally, we view our results as being consistent with previous guidance. We continue to expect break-even operating profit for the full year 2010 before interest and taxes, and a loss of approximately $1.00 per share, both excluding restructuring and unusual items. Due to the divestiture of the Atlas business and the negative effect of currency exchange rate changes, we now expect full year 2010 sales to be in the range of $4.5 to $4.6 billion. While clearly a challenge, our objective remains to return to EPS profitability in the fourth quarter of 2010. Longer term, we continue to view 2011 as a profitable growth year. Assuming a return to a more normalized economic environment, based on the historical performances of our businesses, we believe doubling our revenue, with net income of approximately $6 per share, is achievable by 2013.”

Learn more

Bookmark this page!