Aerial Division Brightest Spot of Soft Third Quarter for Terex
Terex Corp. posted net sales of $1,641.3 million in the third quarter of 2015 compared to $1,809.8 million in the third quarter of 2014, a 9.3-percent decrease. Excluding the impact of currency exchange rates, net sales only decreased 1 percent. Income from operations was $111.9 million in the third quarter, and adjusted income from operations was $126.8 million, compared to $116.8 million and $127.5 million in the year-ago quarter.
Income from continuing operations was $44.8 million compared to $58.7 million a year ago.
“Our marketplace remains challenging,” said Ron DeFeo, Terex chairman and CEO. “We had another good performance in our Aerial Work Platforms business, which delivered year-over-year improvement in profitability in the third quarter as increased productivity and lower material cost more than offset lower sales, mainly in the North American telehandler product category. The Materials Processing business also had a solid quarter, expanding operating margins on relatively flat sales. The Cranes and Construction businesses continue to experience relatively soft market conditions overall, with customers remaining cautious with their equipment purchasing patterns. The Material Handling and Port Solutions business saw declines driven by a decrease in port automation sales.
“As mentioned last quarter, we are seeing pricing pressure in the marketplace, which to date we have been able to mostly offset by reductions in material input costs. We continue to execute very well against the cost-saving initiatives that we have previously communicated. We also continue to make progress towards the completion of the merger with Konecranes Plc., which, when combined with the improvements already underway creates a compelling financial improvement story in an otherwise flat market. Given where we are in the year and the challenging environment we are operating in, we believe we will be at or near the low end of our previously announced earnings guidance for the full year 2015.”
Terex senior vice president and chief financial officer added that the company generated about $62 million of free cash flow in the quarter, lower than anticipated. “We have more work in front of us to improve our working capital efficiency, but we still believe we have an opportunity to meet our free cash flow target for 2015 of $200 to $250 million.”
Terex announced last week that DeFeo is stepping down as CEO Nov. 2 and John Garrison Jr. will take over as president and CEO. DeFeo will continue to serve as executive chairman of Terex through Dec. 31 and will continue as a consultant for the company through the end of 2016.
Terex Corp. is based in Westport, Conn.
