Terex Meets Expectations despite First Quarter Losses
Terex announced a first quarter 2016 loss from continuing operations of $74.2 million on net sales of $1.4 billion, compared to a first quarter loss of $2.1 million on net sales of $1.5 billion in the first quarter of 2015. On an as adjusted basis, the first quarter loss from continuing operations was $5.6 million, excluding after-tax charges of $59.7 million related to severance and restructuring actions as well as $8.9 million related to ongoing merger and acquisition activities.
Despite the losses, Terex management was optimistic.
“Our first quarter results were in line with our expectations,” said Terex president and CEO John Garrison. “Our Cranes and Material Handling & Port Solutions segments had a challenging quarter, impacted by soft markets. Our Aerial Work Platforms, Materials Processing and Construction segments executed well and delivered results that were consistent with or better than last year, on an adjusted basis.
“Our customers remain cautious in the current global environment. Overall, the markets are challenging, but there are pockets of opportunity. Most of our AWP North American rental customers are cautious about their capital requirements, managing time utilization of their fleet and rental rates. The impact from the oil and gas and resource sector declines continue to constrain global demand for many of our products, crane products in particular. We remain focused on what we can control and have initiated a broad-based restructuring program in the quarter to reduce our SG&A costs and align production capacity with demand.”
Garrison said the company expects net sales in 2016 to be about 10 percent less than 2015.
Aerial work platform net sales totaled $520.7 million, up slightly from $517.5 million in the first quarter of 2015. The Construction division was the most successful year over year, growing 16.6 percent from $122.2 million in Q115 to $142.5 in the recently concluded frame. Material Processing was essentially flat, declining from $181.1 million a year ago to $177.3 million this year. The Cranes division dropped 13 percent year over year from $353.3 million net sales to $307.3, while Material Handling & Port Solutions declined 7.7 percent from $344.3 million to $317.7 million.
About the Author
Michael Roth
Editor
Michael Roth has covered the equipment rental industry full time for RER since 1989 and has served as the magazine’s editor in chief since 1994. He has nearly 30 years experience as a professional journalist. Roth has visited hundreds of rental centers and industry manufacturers, written hundreds of feature stories for RER and thousands of news stories for the magazine and its electronic newsletter RER Reports. Roth has interviewed leading executives for most of the industry’s largest rental companies and manufacturers as well as hundreds of smaller independent companies. He has visited with and reported on rental companies and manufacturers in Europe, Central America and Asia as well as Mexico, Canada and the United States. Roth was co-founder of RER Reports, the industry’s first weekly newsletter, which began as a fax newsletter in 1996, and later became an online newsletter. Roth has spoken at conventions sponsored by the American Rental Association, Associated Equipment Distributors, California Rental Association and other industry events and has spoken before industry groups in several countries. He lives and works in Los Angeles when he’s not traveling to cover industry events.