Paced by a 58.9-percent hike in its aerial work platform segment, Terex Corp. went from a loss from continuing operations of $90.9 million, or $0.84 per share in the third quarter of 2010 to a profit of $36.9 million or $0.33 per share in the recently concluded third quarter.
Net sales from continuing operations were $1,803.6 million, a 67.7-percent leap compared with $1,075.8 million in the third quarter of 2010. Excluding the impact of the acquisition of Demag Cranes AG, net sales increased about 44 percent from the year-ago period. Adjusting for the translation effect of foreign currency exchange rate changes and the impact of the acquisition of Demag Cranes, net sales leapt 35 percent from the year ago period.
Income from operations was $52.6 million in the third quarter of 2011, compared to income from operations of $3.6 million in the third quarter of 2010.
The aerial work platform segment posted $448.7 million, compared with $282.3 million in the third quarter a year ago. The North American market showed strong growth as large rental companies continued to replace equipment in their fleets. The independent rental companies have also begun to increase purchases, Terex said. Utilization rates of customer fleets have remained high, with strong spending for replacement despite continuing soft market conditions in construction applications. Internationally demand has steadily increased for deliveries to Europe and the Middle East, which contributed to increased sales in the quarter.
Income from operations for the AWP segment in the third quarter of 2011 was $27 million, or 6 percent of net sales, compared with $14 million in Q310, a 92.8 percent boost.
Net sales for the Construction segment for the third quarter jumped 38.9 percent to $395.4 million compared with $284.7 million for last year’s third quarter. The improvement in net sales was driven by strong demand for backhoe loaders in Russia, compact equipment in central Europe and trucks in developing markets including Russia and South Africa. Demand for material handlers increased especially in central Europe. Demand was slow for roadbuilding products in North America because of weak highway infrastructure spending. The tightening of government-sponsored financing programs constrained roadbuilding demand in Brazil, Terex said.
Loss from operations in the construction segment was $6.4 million, compared to a loss of $7.7 million a year ago.
“Overall our performance continues to improve in terms of net sales and operating profitability even during this economically uncertain time,” said Ron DeFeo, Terex chairman and CEO. “We continue to see end-market demand recover in our Aerial Work Platforms business. We are optimistic about the rest of the year and 2012 for AWP as we are having earlier than normal conversations with customers who have indicated a willingness and need to purchase more equipment. Our Construction segment benefited from strong demand for material handlers, compact equipment and backhoe loaders, but supplier disruptions and higher input costs are still impacting some Construction businesses. In Cranes, improved production execution allowed us to deliver orders from our backlog of larger mobile cranes and port equipment while margins improved both as a result of higher sales volumes and reduced costs from restructuring announced earlier this year. Our Materials Processing business had another solid quarter led by strong demand for larger-capacity machines worldwide.
“Additionally, we strengthened our company this quarter with the addition of Demag Cranes AG. We own approximately 82 percent of the outstanding shares of Demag Cranes and we have begun negotiations of a domination and profit and loss transfer agreement. While this is not expected to be completed until 2012, we have commenced an integration planning process involving the management teams of both businesses.”
DeFeo added that the company expects net sales for the year to be in the range of $6.3 to $6.5 billion and expressed optimism regarding the company’s prospects for 2012.
“Our longer-term outlook is for continued growth in many of our key product categories and end markets,” DeFeo said. “While we are mindful of the continuing economic uncertainty, we continue to believe that the overall market conditions support growth led by our AWP business, mainly in North America, and our Port Equipment business globally. We will continue to be focused on margin expansion and continued cash generation.”
Terex Corp. is based in Westport, Conn.
