Terex Corp. posted second quarter second quarter 2016 income from continuing operations of $109.6 million on net sales of $1.3 billion compared to income from continuing operations of $75.9 million on net sales of $1.4 billion a year ago. However, excluding a benefit of $67.7 million related to the release of tax valuation allowances, after-tax charges of $19.4 million from restructuring and related actions, and after-tax charges of $8.9 million related to merger and divestiture activities, income from continuing operations was $70.2 million.
Terex president and CEO John Garrison said the Q2 results reflect a company in transition.
“With the pending sale of our Material Handling & Port Solutions business and parts of our Construction portfolio, we made several structural changes in the quarter,” said Garrison. “MHPS is now accounted for as a discontinued operation. Going forward, we will be a more focused company, centered around three segments: Aerial Work Platforms, Cranes and Materials Processing.
“We continued to face challenging markets in the second quarter. The North American market for many of our AWP and Cranes products was lower than last year, as expected, which was reflected in both our sales and orders in the quarter. We grew AWP sales in Europe and parts of Asia, but not enough to offset the softness in North America. Our MP segment executed well and improved upon last year’s performance.”
Garrison said Terex remains focused on what it can control. “The steps we took earlier in the year to reduce SG&A helped offset some of the impact of soft markets and competitive pricing but more is needed. In the second quarter, we took additional steps to simplify our manufacturing and lower our cost base. After the sale of MHPS, Terex will be a smaller company. We are committed to reducing our cost structure accordingly.
“On a comparable basis, we believe our earnings per share and net sales for the full year 2016 will be consistent with our previous guidance. As a result of accounting for MHPS as discontinued operations, we now expect earnings per share from continuing operations to be between $0.85 and $1.15, excluding restructuring and other unusual items, on net sales of $4.3 billion to $4.5 billion. This reflects the removal of MHPS earnings from continuing operations and the impact of unabsorbed corporate management costs, but does not reflect any of the benefits of the sale of MJPS, which will be realized upon completion of the sale.”
For the quarter, net sales declined 10 percent from $1,442.9 million in Q215 to $1,297.7 this year. For the first six months of 2016, net sales was $2,412 million, compared to $2,598.7 million in the year-ago period, a 7.2-percent slide.
Net sales for the AWP segment in the second quarter was $593.7 million compared to $688.3 million a year ago, a 13.7-percent decline. For the six month period, net sales declined 7.6 percent to $1,114.4 million. Net sales in the crane segment slid about 15 percent in the second quarter to $357.4 million, and also declined nearly 15 percent in the first six months of the year.
The Material Processing segment increased net sales 2.6 percent to $256.2 in the second quarter. It increased net sales 4.4 percent in the first six months of the year to $480 million.