Terex Cranes up 5%

26 April 2012

Net sales for Terex Cranes in the first quarter of 2012 increased by US$ 21.1 million, or 5.3%, to $419.4 million against the first quarter of 2011.

Strong demand in North America, primarily for rough terrain cranes, was a major driver of this growth, Terex said. Also good were sales of pick and carry cranes in Australia and some port equipment products. Crawler crane sales remained soft in Europe as austerity measures impacted large construction and power projects that are typical users of this product, the company said.

Income from operations at Terex Cranes in the first quarter of 2012 was $7.3 million, or 1.7% of net sales, as compared with a loss from operations of $22.5 million, or 5.6% of net sales, during the first quarter of 2011. The order backlog decreased around 24% compared to 31 March 2011 but increased approximately 7% compared to the end of the year. The year-over-year decrease was primarily due to weakening demand for crawler cranes.

"Our Cranes business improved significantly versus the prior year, with a positive operating margin of approximately 5% in the quarter versus a negative 4% in the prior year period on a similar net sales level, excluding the effects of the write-down of receivables in both periods," said Ron DeFeo, Terex chairman and CEO.

Sales of the Demag industrial and Gottwald port cranes business acquired late in 2011 are included in the Terex Material Handling & Port Solutions segment. Net sales in MHPS for the first quarter of 2012 were $367.5 million. Income from operations was $2.9 million. Demand was for industrial cranes, primarily process cranes and handling technology, and mobile harbour cranes, the manufacturer said. MHPS backlog was about $492 million at 31 March 2012, up 5% compared to the previous quarter.

For Terex Corporation as a whole, first quarter net sales were $1,819.4 million, a 44.8% increase from the $1,256.2 million in the first quarter of 2011. Excluding the impact of the acquisition of Demag Cranes AG, net sales increased approximately 16% from the comparable prior year period, Terex said.

"We are pleased that 2012 is developing as planned," DeFeo continued, "While we still have a significant amount of work ahead of us, we have taken a solid step towards our margin expansion and cash flow objectives for the year. In fact, this is the first time in almost 10 years that we have generated positive operating cash flow in the first quarter, excluding the tax payment made this quarter as a result of the divestiture of the Mining business. We have traditionally used cash in operations in the first quarter, but our improved profitability combined with progress in factory efficiency and inventory focus, helped deliver our improved cash flow."

DeFeo added, "We are focused on executing the plan we articulated in February, namely achieving in 2012 approximately $475 to $525 million in operating profit and earnings per share of $1.65 to $1.85 per share (based on an average share count of approximately 116 million shares and excluding the impact of restructuring and unusual items) on sales of $7.5 to $8.0 billion.

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