AWP Sales Better than Expected in Q2, Terex’s Garrison Says
Terex Corp. reported net sales of $1,181.7 million in the second quarter compared to $1,297.7 for the same period in 2016, an 8.9-percent decrease. Income from continuing operations in the quarter was $95.4 million compared to $109.6 in the second quarter of 2016, a 13-percent slide.
For the first six months of the year, net sales totaled $2,188.6 million compared to $2,412 million in the first six months of 2017, a 9.3-percent decline.
Income from operations for the quarter was $75.9 percent, compared to $73.4 a year ago, a 3.4-percent hike.
“We continue to make progress,” said John Garrison, Terex president and CEO. “Our Cranes segment returned to profitability in the second quarter, realizing benefits from its restructuring program. Our Materials Processing segment continued its excellent performance, growing sales and operating margin for the third consecutive quarter. Aerial Work Platforms sales were better than expected on the strength of the North American market, however, operating margins compressed on pricing dynamics, higher steel costs and the strength of the U.S. dollar.
“Looking forward, backlog in our three segments grew substantially, up 36 percent year-over-year. This is the second consecutive quarter that we increased backlog in each segment. AWP backlog grew 46 percent including growth in North America, Europe and Asia. MP backlog was up 33 percent, and Cranes backlog grew 29 percent.”
Garrison emphasized that Terex is implementing its strategy of simplifying the company, building capabilities in key commercial and operational areas.
“By completing the sales of our U.K. and Indian backhoe loader businesses, we delivered on our commitment to focus our portfolio on three core segments,” he added. “In Germany, we signed an agreement to sell our Cranes manufacturing location in Bierbach, and reached agreement with the Works Council to proceed with our footprint rationalization and cost-reduction plans. Our ongoing efforts to expand our capabilities in sales execution and account management through our Commercial Excellence initiative is starting to be reflected in our growing bookings and backlog.
“Combining our first half results with our current view of market and operational expectations in the second half and our ongoing capital market actions, we are increasing our full year adjusted EPS guidance to $1.05 to $1.15. This reflects improved net sales and operating profit guidance.”
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.