Terex Corp. last week announced income from continuing operations for the third quarter of 2007 of $151.5 million, or $1.45 per share, compared to income from continuing operations of $105.6 million, or $1.02 per share, for the third quarter of 2006. All per-share amounts are on a fully diluted basis.
“Our third-quarter results reflected a continuation of the many trends we have seen develop over the past few quarters,” said Ron DeFeo, Terex’s chairman and CEO. “Our overarching message today is that we are a company that is poised for continued strong and profitable growth. We are committed to achieving our previously stated objective of $12 billion in sales and a 12 percent operating margin by 2010. We anticipate that acquisitions will be a part of this growth strategy, and with the recent volatility in financial markets, we are uniquely positioned to take advantage of opportunities as they arise, as well as continuing to invest in expanding our infrastructure in developing economies.”
Net sales reached $2.2 billion in the third quarter of 2007, an increase of $292.8 million, or 15.4 percent, from $1.9 billion in the third quarter of 2006. Generally, global infrastructure spending continues to drive increased demand in many of our product categories, such as cranes, crushing and screening machines, and mining equipment.
In July 2007, Terex provided guidance for 2007 performance, indicating that anticipated earnings per share for the full year would be between $5.50 to $5.70 per share on net sales of between $8.8 and $9.0 billion. The company’s current expectation is to report full-year 2007 financial results that fall within this previously stated range.
Net sales for the Terex Aerial Work Platforms segment for the third quarter of 2007 increased $25.7 million, or 4.8 percent, to $563.9 million versus the third quarter of 2006.
Strong international demand, particularly an increase of approximately 46 percent in European net sales versus the prior year, drove the increase. North American market demand in the third quarter remained substantially similar to 2006 levels for aerial lift products with the exception of the telehandler product line, which decreased sharply as a result of continued weakness in the domestic residential market. The improved margin performance reflects the continued favorable product mix trend towards higher margin boomlifts and fewer telehandlers, and the benefit of U.S. dollar based manufacturing due to the weak dollar versus many international currencies.
Net sales for the Terex Construction segment for the third quarter of 2007 increased $64.4 million, or 16.6 percent, to $452.1 million versus the third quarter of 2006.
The softening U.S. market, particularly for compact equipment and articulated trucks, caused the business to reallocate units previously destined for North America. Demand for compact equipment in Western and Eastern Europe has more than compensated for slower demand in North America. Additionally, for products under strong demand by European customers, namely the construction-class excavator, supplier constraints continued to impede the ability to timely deliver units to customers. Both the dynamics of the supplier constraint, which will be aided by the continued recruitment of supply chain management and improved production planning processes, and a production slowdown due to reallocation of articulated trucks, are expected to improve in early 2008.
Net sales for the Terex Cranes segment for the third quarter of 2007 increased $97.6 million, or 22.8 percent, to $526.6 million versus the third quarter of 2006.
Global demand for the large crawler and mobile telescopic crane products remained at record levels, while the North American market was strong in the rough-terrain and larger truck crane product categories. Sales of boomtrucks and smaller truck cranes were down as compared to the prior year as a result of softer North American demand for these smaller cranes. This has freed up capacity at the Waverly, Iowa, facility to increase production of higher capacity, higher margin rough-terrain cranes, which remain in high demand.
Net sales for the Terex Roadbuilding, Utility Products and Other segment for the third quarter of 2007 decreased $29.3 million, or 16.4 percent, to $148.9 million versus the third quarter of 2006. Negative results due to a bad-debt reserve and decreased concrete mixer truck demand as a result of continued North American housing softness more than offset profit from the other Roadbuilding and Utility Products businesses. The bad debt reserve was associated with a customer of Terex Asset Services, the company’s re-rental business, which continues to be wound down, and totaled approximately $4 million.
Westport, Conn.-based Terex Corp. is a diversified global manufacturer with 2006 net sales of $7.6 billion.
