Terex reported net sales for the fourth quarter of $1,063.6 million compared to $947.7 million for the same period in 2016, an increase of 9.1 percent year over year. For the full year, revenue was $4,363.4 million compared to $4,443.1 million in 2016, down 1.8 percent primarily because of the sale of non-core businesses and softness in its mobile cranes business.
The Terex AWP (Genie) business segment was a strong contributor to the overall Terex results, with net sales up by 18.6 percent in the fourth quarter and an increase of 4.7 percent for the full year with backlog up by 51 percent.
For the full year, Terex reported income from continuing operations of $60 million compared to a loss from continuing operations of $193 million for 2016.
“The fourth quarter marked an excellent finish to an important year for Terex,” said John Garrison, Terex president and CEO. “We increased operating margins, bookings and backlog in every segment and significantly improved earnings per share. We delivered on our commitments in 2017. The sales of MHPS and the remaining Construction businesses concluded the Focus element of our strategy and created substantial value for our shareholders. We continued to simplify the company by executing our footprint rationalization plan, exiting 12 manufacturing locations totaling 2.6 million square feet. We reduced administrative expenses while increasing investment in innovation, strategic sourcing, and commercial excellence. We fundamentally improved our capital structure by executing our disciplined capital allocation strategy, reducing debt by $583 million, refinancing at the lowest interest rates in the company’s history, and returning capital to shareholders by repurchasing $924 million of Terex stock.”
Garrison said that by implementing strategy, strengthening the company, and increasing backlog by 56 percent, Terex is well positioned for an improving global market environment in 2018.
“We expect to increase revenue and improve operating margins in every business segment,” Garrison added. “We will continue to implement the Simplify and Execute to Win elements of our strategy, and follow our disciplined capital allocation strategy. We expect to deliver 2018 earnings per share of between $2.35 and $2.65, excluding restructuring, transformation investments, and other unusual items, on net sales approximately 10 percent higher than 2017.”
“AWP enters 2018 with clear signs that markets are improving for the first time in several years and we believe the Genie business is well positioned for the improving market,” said Matt Fearon, Genie president, Terex AWP.
The Cranes business segment benefited from significant restructuring activity in 2017. In the fourth quarter, net sales for the segment were essentially flat versus 2016, while the business was profitable for the most recent three quarters. The focus on simplifying the business to be more responsive to customer needs coupled with the introduction of new products from the Demag and Terex brands are paying off, with a backlog up 70 percent.
“We will be launching innovative new products throughout the year,” said Steve Filipov, president of Terex Cranes. “The global crane markets have stabilized, and we see pockets of growth. We plan to improve productivity on higher volumes and better operational execution in 2018.”