Terex Corp. today announced net sales were $1.91 billion in the second quarter of 2013, a decrease of 5.1 percent from $2.01 billion in the second quarter of 2012. Income from operations was $85.3 million in the second quarter of 2013, a decrease of $89.7 million when compared to income from operations of $175.0 million in the second quarter of 2012. Excluding the pre-tax impact of restructuring and related charges of approximately $65 million, income from operations as adjusted was $150.3 million in the second quarter of 2013.
“As we communicated in mid-June, the marketplace overall has softened compared to what we originally anticipated for 2013,” said Ron DeFeo, Terex chairman and CEO. “The second-quarter results reflect this lighter order environment overall, as our Cranes, Construction and Material Handling & Port Solutions (MHPS) segments all experienced lower revenues than originally expected. However, we do continue to see strong performance from our Aerial Work Platforms business, and good operational execution by our Materials Processing business in a challenging environment. Overall by geography, North America continues to improve, but now at a slower pace. Europe remains challenging, particularly for our Cranes, Construction and MHPS segments, and the markets in the rest of the world remain mixed.
“As a result, and as previously previewed, we took substantive actions in the second quarter to further adjust the cost structure of the MHPS, Cranes and Construction organizations. While these actions are difficult, the benefits to our stakeholders are expected to have a meaningful impact on our future results, particularly in 2014 and beyond. We expect stronger MHPS performance in the second half of 2013 as we begin to deliver increased revenue from their large backlog. These actions provide us with confidence in the near-term execution of our revised plan, and are necessary as we pursue our longer term goals.”
Performing particularly strong in the second quarter was Terex AWP, which generated net sales of $606.6 million, a 17-percent increase from $516.6 million in the second quarter of 2012.
The company’s overall outlook for fiscal year 2013 financial performance is consistent with the guidance provided on June 17.
“Terex remains focused on improving profit through continued vigilance on pricing and operating costs,” DeFeo said. “We are working to more thoroughly integrate our businesses and consistently generate free cash flow. We reiterate our earnings per share outlook of 2013 to be between $1.90 and $2.10 per share, excluding restructuring and other unusual items, on net sales of between $7.5 billion and $7.7 billion.”
Terex also announced it has completed the purchase of approximately 14 percent of the shares of Terex Material Handling & Port Solutions AG (formerly Demag Cranes AG). With this acquisition of shares, the company now owns more than 95 percent of the TMHPSAG shares. Terex has also initiated a squeeze-out process that will lead to its owning 100 percent of the business. These actions are consistent with the company’s plans to simplify its capital structure as this will eliminate the obligation to make guaranteed payments to the minority shareholders and will also remove the complexity and financial cost of maintaining the entity as a German public company.
Backlog for orders deliverable during the next 12 months was approximately $2.18 billion at June 30, essentially stable from March 31, and an increase of approximately 5 percent from June 30, 2012. Strong demand for AWP products along with existing large port equipment orders for MHPS, which are now deliverable in the next 12 months contributed positively to the increased backlog. This was partially offset by lower demand for cranes, mainly as a result of softness in Europe, Latin America and Australia.
Terex Corp. is headquartered in Westport, Conn.