Terex Corp. last week announced a net loss from continuing operations for the third quarter of 2010 of $89.2 million, or $0.82 per share, compared to a net loss from continuing operations of $106.4 million, or $0.98 per share, for the third quarter of 2009. Contributing to the third-quarter 2010 net loss was a pre-tax expense of approximately $21 million associated with market to market derivative instruments intended to partially mitigate risks associated with 5.8 million shares of the common stock of Bucyrus International, acquired in connection with the Mining business divestiture.
Net sales for continuing operations were $1.08 billion in the third quarter of 2010, an increase of 15.2 percent from $933.9 million in the third quarter of 2009. Income from operations was $3.0 million in the third quarter of 2010, an increase of $103.3 million as compared to a loss from operations of $100.3 million in the third quarter of 2009.
“Our third-quarter operating results were mostly in line with our expectations, but with greater than anticipated Cranes weakness,” said Ron DeFeo, Terex chairman and CEO. “Our Aerial Work Platforms and Materials Processing results were solid, with positive order and backlog trends. Construction had near breakeven operating profit, excluding unusual items, but the European Cranes business fell faster than anticipated. We also had a number of discrete tax charges that, along with the derivative effect of the Bucyrus equity strength, contributed to non-operating expenses.
“We expect the fourth quarter to reflect continued strengthening trends in AWP, Construction and MP, with a weaker Cranes business than we had previously anticipated. Consequently, we expect net sales to increase approximately 10 to 15 percent sequentially and to generate a consolidated operating profit of roughly $15 million in the fourth quarter, excluding unusual items, although this will not be sufficient to generate net income in the quarter.”
Net sales for the AWP segment for the third quarter of 2010 increased $82.0 million, or 41.2 percent, to $280.9 million versus the third quarter of 2009. The North American market has begun to recover from historic lows, and the South American and Australian markets continued to show good growth trends.
“Stable demand and fleet age issues are leading rental and utility customers to address equipment requirements as evidenced by recent orders,” said Tom Riordan, Terex president and chief operating officer. “Furthermore, we have successfully captured additional market share in some developing markets and, while the impact is not yet material, we have begun limited production in China. Recent customer meetings have reinforced our confidence in an improved 2011 for AWP.”
Net sales for the Construction segment for the third quarter of 2010 increased $79.5 million, or 38.5 percent, to $286.0 million versus the third quarter of 2009. The improvement in net sales was driven by increased demand for material handlers and trucks and for compact equipment in certain products and regions.
“This business has done the hard work of undertaking a huge restructuring and, while we still have a few challenges ahead, next year looks like the turning point we expected,” Riordan said. “The product line-up has been significantly revamped and we are in pilot production and customer trials with several new models that we expect will pay dividends in mid-2011 and beyond.”
Terex Corp. is a diversified global manufacturer operating in four business segments: Aerial Work Platforms, Construction, Cranes, and Materials Processing.
