Terex Corp. this week posted income from continuing operations of $5 million for the first quarter of 2011, 4 cents per share, compared to a loss from continuing operations of $79 million or 73 cents per share in the first quarter of 2010. The first-quarter results were favorably impacted by an after-tax gain of $33.2 million, or 28 cents per share on the sale of about 1.8 million shares of Bucyrus International common stock.
Net sales from continuing operations were $1.26 billion in the first quarter, an increase of 34.2 percent from $935.9 million in the year-ago quarter. Loss from operations was $9.3 million in the quarter, an improvement of $57.2 million compared to a loss from operations of $66.5 million in the year-ago period.
“Overall, the first-quarter results were largely in line with our expectations,” said chairman and CEO Ron DeFeo. “Order activity continues to accelerate and demand has picked up sharply, leading to increased quarterly sales in most of our businesses. This is most evident by the significantly increased backlog seen in all four of our segments at the end of the first quarter.”
DeFeo pointed out, however, that increased input costs, associated with purchased materials such as steel, hydraulics, tires and other manufacturing components was, to a degree, offsetting favorable demand trends.
Net sales for the aerial work platform segment increased 74.7 percent in the first quarter, from $215.7 million in 2010’s first quarter to $376.8 million this year. The North American market continued its recovery with increased capital expenditures from both large and medium-sized rental customers related to fleet replacement. All other geographies experienced strong growth, especially Western Europe.
“Our AWP business has seen a substantial increase in demand from the North American rental channel with backlog up approximately 123 percent from this time last year and approximately 45 percent from the end of 2010,” said DeFeo. “We have initiated pricing increases in AWP starting with deliveries scheduled for late in the second quarter of 2011. However, the current operating margin reflects the impact of orders placed early in the recovery without the benefits of the new pricing structure or the benefit of operating efficiencies as we accelerated production to meet the increasing demand.”
Other segments posted strong first quarters for Terex as well. Net sales for the Construction segment increased 67.7 percent to $342.9 million. The improvement in net sales was driven by strong demand for the material handler product and increased demand for trucks, especially for quarry applications in developing markets. Also contributing was demand for backhoe loaders in Western Europe and Russia, increased interest in compact equipment among rental companies throughout the Americas and strong parts sales driven by aging fleets and higher utilization.
As expected, net sales for the Cranes segment dropped 3.7 percent to $398.3 million, although there was a degree of recovery in demand throughout the Americas with shipments driven predominantly by energy and commercial construction applications.
Net sales for the Materials Processing segment jumped 40.7 percent year over year, with machine sales increasing worldwide, particularly in Australia, South Africa and the Americas. Northern and Eastern European markets have started to show signs of recovery, while demand in Southern European markets remained fairly soft.
Terex Corp. is based in Westport, Conn.
