New Terex CEO John Garrison expects global economic conditions to continue to be challenging in 2016

Terex Revenue Declines in Fourth Quarter and Full Year 2015

Feb. 17, 2016

Terex posted net sales of $1,577.7 million compared to $1,789.4 million in the fourth quarter of 2014, an 11.8-percent slide.

Michael Roth

Terex posted net sales of $1,577.7 million compared to $1,789.4 million in the fourth quarter of 2014, an 11.8-percent slide. Full year revenue decreased from $7,308.9 million to $6,543.1 million, a 10.5-percent drop. Income from continuing operations as adjusted was $55.4 million, or $0.50 per share in the fourth quarter, compared to $80.3 million, or $0.72 per share in the fourth quarter of 2014.

For the full year, Terex reported income from continuing operations of $142.5 million compared to $259 million a year ago.

“The macro operating environment in the fourth quarter was challenging,” said John Garrison, Terex president and CEO. “Global economic volatility has made our customers more cautious overall, resulting in fourth quarter order activity that was below expectations in most business segments and product categories. On a positive note, free cash flow for the year came in at a strong $290 million, nearly double our 2015 net income. Cash flow generation will be a primary focus going forward.”

Garrison said looking forward to 2016, the company does not expect market conditions to improve. “We anticipate lower fleet replacement from North American AWP rental customers,” he said. “The oil and gas commodity market decline will continue to impact demand across many of our products. We are developing and implementing plans to align our cost structure with these market realities. We expect 2016 earnings per share to be between $1.30 and $1.60, excluding and restructuring and other unusual items, and net sales to be about 10 percent lower than 2015.”

Terex’s aerial work platforms division posted $455.3 million in revenue in the fourth quarter compared to $468.2 in the fourth quarter of 2014, a 2.8-percent decline. For the full year, revenue slid 6.6 percent from $2,369.7 million to $2,213.4 million in 2015.

The cranes division slid moderately in the fourth quarter from $474.3 million in Q414 to $437.3 million in Q415, a 7.8-percent decline. For the full year, crane revenue was $1,699.7 million compared to $1,791.7 million in 2014, a 5.1-percent decrease.

Material handling and ports solutions dropped from $515.6 million in the fourth quarter of 2014 to $390 million in 2015, a 24.4-percent plunge, while dropping 18.9 percent for the full year. Materials processing was flat year over year in the fourth quarter, dropping 2.5 percent for the full year. The construction segment declined 24.5 percent in the fourth quarter and 19.5 percent for the full year.