Slim Terex boosts sales, but cranes still drag
22 July 2010A recently slimmed down Terex reported second quarter net sales for continuing operations up 14% to $1,079m. The one segment that failed to improve was cranes, where sales slipped 5%. Without the benefit of currency changes and acquisitions, the crane sales decline would have been 21%.
Over the last year, Terex has divested its Mining, Atlas, Powertrain and Load King businesses. At the same time, it has restructured its business and realigned its manufacturing (for which it recorded an $11m pre-tax charge this quarter). The result of the changes is that net sales for continuing operations are up $132.6m, to $1,079.9m, and net losses were cut from $99.6m to $13.1m.
Chairman and CEO Ron Defeo said, "We are cautious, but positive, about our prospects for continued improvement. Backlog in three of our four segments indicate slightly improved near-term prospects. Our factories have returned to more regular work schedules and production output. These improving business conditions are the basis for our cautious optimism about the balance of 2010 and lay the foundation for what we feel will be a positive business environment in 2011 for most of our product categories.”
Most, but not all, product categories: net sales for the crane segment continued to decline, falling $23.8m, or 5%, to $449.1m. Currency exchange rate changes contributed around $5m to net sales, and net sales related to acquisitions added around $80m; without them, net sales would have decreased by around a fifth.
The company's figures reflected the prevailing trend of the bigger the crane, the better the business. While demand for lower capacity cranes, including smaller all terrains, continued to weaken, the company said customers continued to purchase high capacity crawlers. The company attributed these trends to soft commercial construction demand, versus stronger demand from global infrastructure and power projects.
