Driven by Rental Industry Demand and Demag Impact, Terex Posts 35.2-Percent Q2 Increase

Terex Corp. posted a 35.2-percent year-over-year increase in net sales in the second quarter, with $2.01 billion in revenue compared to $1.49 billion in the second quarter of 2011. Excluding the impact of the acquisition of Demag Cranes AG, net sales increased about 11 percent from the comparable period.

Income from continuing operations was $83.6 million; or 75 cents per share for Q212, compared with income from continuing operations of $0.9 million or $0.01 per share for the year-ago period.

Net sales for the AWP segment for the second quarter increased to $605.7 million, compared to $485.7 million a year ago, a 24.7-percent leap. Terex experienced increased replacement-based demand in the North American rental channel for its aerial work platform products. The Australian market continued to be a solid contributor because of natural resource-based construction spending.

The construction segment increased 8.1 percent in the quarter, from $359.7 million a year ago to $388.8 million in the recently concluded quarter. Terex Cranes’ segment increased 4.3 percent.

Net sales for the company in the first six months of 2012 were $3.83 billion, compared with $2.74 billion a year ago, a 39.6-percent jump. The first six months soared 37.9 percent in the AWP segment, elevating from $863.9 million in the first six months of 2011 to $1.12 billion in the first six months of this year.

“We had a strong second quarter,” said Terex chairman and CEO Ron DeFeo. “This year’s focus had been to improve margins, generate cash and integrate Demag Cranes AG. We are on or ahead of expectations in these categories. Margin improvement resulted from better price realization and cost discipline. We generated free cash flow of approximately $155 million primarily from profit improvement. The integration team has identified and is beginning implementation of improvement opportunities and realizing synergies.

“Our historical businesses continued to grow with improved price realization and reduced expenses (both manufacturing and SG&A) due to actions taken in the prior year. Consequently, the overall operating margin increased significantly to 8.7 percent, and to 9.9 percent excluding the Demag Cranes acquisition. Our AWP and cranes segments had strong performances and are well positioned for continued improvement in the second half of the year. The construction segment returned to profitability for the first time since 2008 and Materials Processing continued their positive trend. Overall we believe the strength in our AWP and Cranes segments, as well as in North America and select other markets like Australia, will offset the weakness we expect to experience in certain markets during the second half of the year.”

DeFeo said that despite concerns in Europe and foreign currency headwinds, Terex expects to achieve earnings for the full year of $1.95 to $2.05 per share — based on an average share count of about 114 million shares and excluding the impact of restructuring and other unusual items — on sales of $7.5 billion to $7.8 billion.

Terex Corp. is based in Westport, Conn.