Westport, Conn.-based Terex Corp. last week announced income from continuing operations for the second quarter of 2007 of $174.6 million, or $1.66 per share, compared to income from continuing operations of $113.2 million, or $1.10 per share, for the second quarter of 2006.
Net sales reached $2.3 billion in the second quarter of 2007, an increase of $321.8 million, or 15.9 percent, from $2.0 billion in the second quarter of 2006. The increase in net sales versus the prior year period was favorably impacted approximately $74 million due to the effect of currency exchange rates. All per share amounts are on a fully diluted basis.
“We are pleased with the strong performance of our overall business in the second quarter,” said Ronald DeFeo, Terex’s chairman and CEO. “Given our continued steps forward on internal improvements, combined with a global economy that we anticipate remaining strong for the foreseeable future, we remain positive in our outlook for Terex’s financial performance.”
“Our record backlog as of June 30, was $3.8 billion, up 59 percent from our backlog at June 30, 2006, provides insight into the strength of the global business environment,” said Tom Riordan, Terex’s president and chief operating officer. “Worldwide crane demand continues to impress us, as the result of demand from large infrastructure projects in Asia, the Middle East and Africa. Both Construction and Aerial Work Platforms businesses continue to experience rapidly increasing European demand, while robust commodity demand has benefited our Materials Processing and Mining businesses.”
“In April 2007, we provided earnings guidance for our 2007 performance, indicating that we anticipated earnings per share for the full year to be towards the high end of our initial $5.00 to $5.40 per share range, including the impact of certain items such as the costs associated with the early retirement of debt, and we stated that we expected net sales for 2007 to be between $8.2 and $8.5 billion,” DeFeo added. “Today we are revising our expectations upward for our 2007 full-year performance, and we now anticipate earnings per share on a comparable basis to be between $5.50 to $5.70 on net sales of between $8.8 to $9.0 billion.”
Net sales for the Terex Aerial Work Platforms segment for the second quarter of 2007 increased $60.7 million, or 10.5 percent, to $640.3 million from $579.6 million in the second quarter of 2006. Continued strong international demand, particularly from Europe, as well as the favorable impact from currency exchange rates, drove the net sales increase, supported by stable demand fundamentals in the U.S. market.
“Sales to Europe and the Middle East drove much of the improvement versus the prior year, as global demand fueled by large infrastructure projects increased demand for our products, particularly large boomlifts over 60 feet in operating height,” said Tim Ford, president – Terex Aerial Work Platforms. “With regard to the U.S. market, demand in the second quarter remained substantially similar to 2006 levels for aerial lift products, although sales of the telehandler product line decreased sharply, reflecting weakness in the North American residential market.
“Looking forward, we continue to forecast strong international growth for 2007 and beyond, favorably driving results for our segment. As mentioned in our first-quarter release, one of our main challenges is the time and investment required to ship our products from our existing facilities, mostly in the U.S., to customers around the world. We started shipping our Z-boom product this quarter from our manufacturing facility in Italy, and we have announced plans to start a scissor lift production line in the United Kingdom this year in one of Terex’s existing facilities.”
Net sales in the Terex Construction segment for the second quarter of 2007 increased $73.6 million, or 17.2 percent, to $502.5 million from $428.9 million in the second quarter of 2006. Strong global non-residential construction trends drove the net sales increase, with particular strength in Europe for compact construction equipment and solid global demand for heavy trucks.
“The markets for our construction equipment remain strong,” said Robert Isaman, president - Terex Construction. “Global non-residential construction spending trends continue to drive our total sales higher, with increased global spending favorably impacting our excavator and truck product lines in particular. Compact construction equipment sales and profitability in Europe continue to benefit from the improving economies in both Western and Eastern Europe. The expansion of our Asia Pacific product footprint to meet the surging demand from that region is progressing. We continue to pursue activities that will decrease the cost of our products, such as our recent announcement that we have scheduled production of compact construction equipment in China to start in the first quarter of 2008.”
Net sales in the Terex Cranes segment for the second quarter of 2007 increased $103.9 million, or 23.6 percent, to $544.5 million from $440.6 million in the second quarter of 2006, reflecting improvement in all product categories, as well as the favorable impact of currency exchange rates. Excluding the impact of currency exchange rates, net sales grew approximately 19 percent.
"The Terex Cranes segment continued to demonstrate significant growth in both sales and profitability," said Steve Filipov, president - Terex Cranes. "The global market for cranes continues to be outstanding, and our manufacturing locations are making real improvements in our ability to increase throughput. Also leading to increased sales is a shift to larger cranes, such as our large crawler cranes from Germany and rough terrain cranes in North America, as well as the favorable impact of pricing. That said, global demand for our products continues to outpace supply, as evidenced by our record backlog."
Net sales for the Terex Roadbuilding, Utility Products and Other segment for the second quarter of 2007 declined $26.2 million, or 13.4 percent, to $168.8 million, versus $195.0 million for the second quarter of 2006. The downturn in the North American residential housing market has negatively impacted sales of concrete mixers. To a lesser extent, softer demand for utility aerial devices following strong buying in 2006 and early 2007 ahead of the Tier 3 emission change contributed to the decline in sales.
Terex Corp. is a diversified global manufacturer with 2006 net sales of $7.6 billion.