Terex Revenue Declines in Fourth Quarter and Full Year 2019
Terex Corp. announced fourth quarter net income of $18.5 million, or $0.26 per share, on net sales of $885 million, compared to the fourth quarter of 2018 which had income from continuing operations of $19.6 million on net sales of $1,048.8 million, an 18.5-percent revenue decline. For the full year, Terex reported income from continuing operations of $209.7 million, or $2.92 per share, on net sales of $4.353.1 million compared with income from continuing operations of $241.7 million, or $3.14 per share on net sales of $4.517.2 million for the full year of 2018, a 3.6-percent decline.
The Terex AWP business segment, including Genie and Terex Utilities, reported net sales of $500.1 million in the fourth quarter, a 20.8 percent year-over-year decline from the fourth quarter of 2018, because of challenging markets in North America and Europe. Global Terex AWP backlog totaled $753 million and bookings in the quarter were $755 million.
“Our fourth quarter operating results were generally in-line with our expectations on lower revenue and reflect continued challenging global market conditions for industrial equipment,” said John Garrison Jr., Terex chairman and CEO.
“The fourth quarter completed a year where we faced considerable market uncertainty after two years of robust demand,” said Terex AWP president Matt Fearon. “We are positioned well for 2020 and excited about our innovative new products, as well as our long-term growth prospects. Particularly, we are expanding our Changzhou, China, facility in 2020 to accommodate the market growth in China for aerial products.”
In regard to the Terex Utilities, Fearon added: “The Terex Utilities team continues to execute well and will transition to their new state-of-the-art manufacturing and engineering facility this summer. This new facility will improve efficiency and increase capacity, which together with new products and service will enable Terex Utilities to continue to grow.”
“In 2019, we focused on safety, strengthening our balance sheet and investing in our products, manufacturing capability and parts and services,” added Garrison. “Despite the current industrial equipment market challenges, the longer-term outlook for our businesses remains healthy and points to a promising future for Terex. We are encouraged by the adoption of our equipment in emerging markets and are well-positioned to continue to deliver differentiated solutions to our customers.”
Tempered by a slower market, Garrison’s predictions for 2020 remained cautiously optimistic. “We expect customers to remain cautious with their capital expenditure decisions in 2020. We expect full year EPS to be between $1.85 to $2.35 on net sales of approximately $3.9 billion. In addition, we expect full year free cash flow to be approximately $140 million. We remain committed to investing in the development of innovative products and solutions for our customers, while continuously improving our operational performance. We believe this is a strong formula for long-term shareholder value creation."
For the full year, the AWP division posted net sales of $2,726.6 million compared to $2,950.4 million in 2018, a 7.6-percent decline.
Terex’s Materials Processing division reported $321.4 million in net sales in the fourth quarter, compared to $357.9 million, a 10.2-percent drop. For the full year, however, Materials Processing posted an increase, from $1,322.6 million in 2018 to $1,371.4 million in 2019, a 3.7-percent increase.
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.