Terex Corp. today announced income from continuing operations of $38.8 million, or $0.35 per share, on net sales of $6.50 billion for the full year 2011, as compared to a net loss from continuing operations of $215.5 million, or $1.98 per share, on net sales of $4.42 billion for the full year 2010. Robust sales from Genie, Terex’s aerial division, were the leading driver in the improvement, with significant improvement coming from the independent rental sector.
Net sales for the AWP segment for the fourth quarter of 2011 increased $94.6 million, or 27.6 percent, to $437.4 million versus the fourth quarter of 2010. Rental utilization rates and rental rates achieved by Terex customers continue to increase in most regions and have been particularly strong in North America. In addition, the company posted increased volume from independent rental firms during the fourth quarter of 2011 and into 2012. Increases in fleet age have also led many rental companies to replace equipment in their fleets. The company also achieved strong growth in Europe as rental companies continued to replace machinery when needed with improving utilization. European rental rates increased but at a slower rate than in North America.
Income from AWP segment operations in the fourth quarter of 2011 was $26.2 million, or 6.0 percent of net sales, as compared to income from operations of $11.0 million, or 3.2 percent of net sales, during the fourth quarter of 2010, a 138-percent hike.
“During 2011, we made significant investments and improvements and implemented actions to set us on a course toward improved profitability in 2012 and beyond,” said Ron DeFeo, Terex chairman and CEO. “We have seen further recovery in many of our end markets as utilization rates improve and existing fleets age. This is consistent with an overall improving construction and economic environment. Emerging economies continue to grow most rapidly, along with solid performance in North America. This has helped offset some of the continuing weakness in several European markets.
“From a segment perspective, we continue to see recovery in most of our end markets. In our Aerial Work Platforms business, we see strong demand and a growing backlog from a more diverse mix of customers. More than half of our North American net sales for aerials came from smaller independent rental customers in the fourth quarter of 2011. We also expect margins to be meaningfully improved in 2012 as 2011 pricing actions take hold.”
Net sales were $1.96 billion in the fourth quarter of 2011, an increase of 47.5 percent from $1.33 billion in the fourth quarter of 2010. Excluding the impact of the acquisition of Demag Cranes AG, net sales increased approximately 20 percent from the comparable prior-year period. Income from operations was $32.0 million in the fourth quarter of 2011, an improvement of $32.5 million as compared with a loss from operations of $0.5 million in the fourth quarter of 2010.
For the fourth quarter of 2011 loss from continuing operations was $4.0 million, or $0.03 per share, compared to a loss from continuing operations of $32.5 million, or $0.30 per share for the fourth quarter of 2010. All results are for continuing operations, unless stated otherwise. Discontinued operations include the Mining, Atlas and Powertrain businesses. Results for Demag Cranes AG are reported as the Material Handling & Port Solutions segment.
Net sales for the Construction segment for the fourth quarter of 2011 increased $92.8 million, or 29.3 percent, to $409.0 million versus the fourth quarter of 2010. The increased sales were driven by continued demand in the developed markets of North America and Europe, particularly for compact equipment and material handlers in Germany. Sales growth in developing markets during the quarter was most evident in Russia, Indonesia and South Africa, largely for trucks and material handlers.
Loss from operations in the fourth quarter of 2011 was $2.8 million, or 0.7 percent of net sales, as compared to a loss from operations of $4.3 million, or 1.4 percent of net sales, during the fourth quarter of 2010. Operating results were negatively impacted by continued soft demand for roadbuilding equipment and the company incurred charges to reduce staffing to better align production with lower demand. Higher material and component costs from various suppliers also negatively impacted profitability.
“The Construction segment continues to be our most challenging operation,” said DeFeo. “During the year, real progress was made but this business went through a substantial transition with Tier 4 engine implementations, which required substantial changes or updates depending on the individual product and market. We believe we have now positioned the segment for profitability in 2012 and will be focusing on geographies and products where we have the greatest profitability.”
The company said it expects equipment demand to continue to rise in 2012, pointing particularly to AWP fleet replacement in the rental channel.
“Overall, our focus for 2012 will be on profit improvement and cash generation as opposed to net sales growth,” DeFeo said. “Overall, our current outlook for net sales in 2012 is $7.5 to $8.0 billion, an increase of 15 to 20 percent from 2011, and approximately 5 percent excluding the impact of 2011 acquisitions.”
The company said it expects income from operations to be $475 to $525 million and 2012 earnings per share to be approximately $1.65 to $1.85 per share for the year based on an average share count of 116 million shares, excluding the impact of restructuring and unusual items.
Westport, Conn.-based Terex Corp. is a diversified global manufacturer reporting in five business segments: Aerial Work Platforms, Construction, Cranes, Material Handling & Port Solutions and Materials Processing. It manufactures a broad range of equipment for use in construction, infrastructure, quarrying, manufacturing, mining, shipping, transportation, refining, energy and utility industries.
