Terex posted a 31.2-percent increase in fourth-quarter net sales, with $1.326 billion in revenue compared with $1.011 billion for the same period in 2009. For the full year, Terex posted a 14.5-percent jump in net sales, with $4.418 billion in revenue in 2010, compared with $3.858 billion for 2009.
Loss from operations was $0.5 million in the fourth quarter of 2010, an improvement of $74.8 million compared to a loss from operations of $75.3 million in the fourth quarter of 2009. For the full year of 2010, the company reported a net loss from continuing operations of $215.5 million, compared to $407.5 million for the full year 2009.
“For Terex, 2010 was clearly a transitional year as we rebounded from the trough levels of 2009 and completed the sale of our mining business,” said Terex chairman and CEO Ron DeFeo. “We have seen order rates accelerate throughout 2010 for most of our businesses, including a recent sequential upturn in order rates in our Cranes segment as we secured several large contracts in the fourth quarter for longer-term delivery schedules. Markets in Latin America, India and China are driving large crane and off-highway truck equipment demand. Markets such as the Americas and Western Europe have shown a market rebound in demand for smaller equipment, namely aerial work platforms in the United States and compact construction equipment in Germany, central European countries and Latin America.
“On the operations front, all of our segments increased net sales this past quarter on both a yearly and sequential basis, and three of our four segments had positive income from operations. With increases in backlog and order quotation activity, we are starting to see some positive operational catalysts. We have increased production across most of our segments and anticipate further increases throughout 2011 to match the anticipated heightened demand for our products. Although costs associated with increased production will also rise, we anticipate net sales and our income from operations will outpace these costs on a consolidated basis.”
DeFeo added that the challenges of the improved business environment included competitive pricing and increasing supply costs for components and raw materials. “We remain committed to our investments in critical improvement initiatives,” he said. “Specifically, we will continue to implement changes driven by the Terex Business System, the framework around which we are building our capabilities as a superb operating company that we anticipate will deliver value in the coming years through improved capacity, response time, customer service and quality. Another key initiative will be the continued rollout of the Terex Management System, our global enterprise resource planning system. Approximately 19 percent of our net sales are from businesses on the Terex Management System and we anticipate this will increase to approximately 50 percent by 2012.”
DeFeo said that improved information will enhance management decision-making and customer responsiveness. He added that the company’s outlook for 2011 was very upbeat.
“The foundation of a business recovery has become visible to us, although we are in the early stages,” he said. “As anticipated we see improved demand in our early cycle product categories of aerial work platforms and materials processing. Our construction segment is seeing positive demand from certain markets, such as Central Europe and Brazil. Additionally, we expect that new product offerings, such as our skid-steer loaders, will begin to favorably impact our results as we move through 2011. Our Cranes segment is experiencing some short-term weakness, but the mobile crane product offering has stabilized.”
Net sales for the AWP segment for the fourth quarter increased $135.8 million, or 66.3 percent to $340.6 million. The North American market continued its recovery with increased capital expenditures from rental companies. The Latin American business had a very good quarter by increased sales of booms and telehandlers to Brazil and other markets, more than doubling the segment’s revenue sequentially to that region.
Operating profit for the AWP segment in the fourth quarter was $11.7 million, or 3.4 percent of net sales, compared to an operating loss of $32.6 million in the year-ago quarter.
Net sales for the Construction segment increased $112.1 million, or 54.3 percent, to $318.4 million compared with the fourth quarter of 2009. Notable contributions came from the material handler, truck and compact equipment businesses in Europe and the Americas.
Net sales for the Cranes segment in the fourth quarter increased $9.8 million, or 1.8 percent, to $549.1 million.
Terex is predicting a strong 2011. “Our current outlook for net sales in 2011 is $5 billion to $5.4 billion, an increase of roughly 13 to 22 percent from 2010,” added DeFeo. “Our expectation for income from operations is a profit of $220 million to $250 million.”
Terex Corp. is a diversified global manufacturer operating in four business segments: Aerial Work Platforms, Construction, Cranes and Materials Processing. The company is based in Westport, Conn.