Terex net income falls
By Helen Wright25 October 2012
Construction equipment manufacturer Terex has reported lower net income and essentially flat sales in the third quarter after weakening demand in its construction and materials processing divisions offset more positive results in its aerial work platforms (AWP) division.
The company reported overall third quarter net income of US$ 30.2 million, down from US$ 36.9 million for the same three months last year. Net sales were up a marginal +1% year-on-year at US$ 1.8 billion.
Terex chairman and CEO Ron DeFeo said, “The mix of performance was varied, with our cranes, AWP and material handling & port solutions (MHPS) segments achieving favourable results, while the results of our construction and materials processing segments showed some softening. Overall, we remain optimistic that the end markets for many of our products will continue to improve.”
Terex’s MHPS division – the largest equipment division by revenue – reported a +22.2% rise in net sales to US$ 470.8 million for the third quarter, and operating income of US$ 19.9 million, compared to an operating loss of US$ 1.8 million last year.
Meanwhile, the manufacturer’s AWP division reported a +17.2% year-on-year jump in sales for the third quarter to US$ 526.1 million, while operating income stood at US$ 59.3 million, compared to US$ 27 million a year earlier.
Terex cranes reported net third quarter sales of US$ 394.6 million, down -5.4% year-on-year, but an increase in operating income to US$ 47.6 million, compared to US$ 25.1 million in the third quarter of 2011.
Terex construction saw net sales drop -26.6% year-on-year to US$ 290.4 million in the third quarter, and reported an operating loss for the period of US$ 8.3 million, deeper than last year’s loss of US$ 6.4 million for the same three months.
Terex said the unit had been hit by softer demand, particularly in Western Europe, and it had taken “aggressive action” to decrease production in order to match current market demand. This included introducing shortened work weeks as well as reductions in force and temporary production shutdowns. It said charges of US$ 1.3 million were taken in the quarter related to these actions.
Finally, the materials processing division reported a -12.4% year-on-year drop in net third quarter sales to US$ 149.9 million on operating income of US$ 15.2 million, compared to US$ 12.4 million last year.
Overall, Terex said its backlog for the next 12 months stood at US$ 1.7 billion at 30 September – down -20% year-on-year. As well as declining demand in construction, cyclical factors were partly to blame – it said the timing of order placement by rental companies in its AWP division varied during the current and prior year periods, skewing both yearly and sequential comparisons.
For the full-year, Mr DeFeo said the company expected to report sales of US$ 7.5 billion, up from US$ 6.5 billion in 2011.