Terex Cranes released its results for the first quarter of 2013, with net sales up 4% to $470.9m from $455.2m in Q1 2012. Gross profit was also up from last year with the company registering $85.9m compared to $74.9m last year. The business made savings with selling, general and administrative expenses (SG&A) being reduced by $8.5m from 2012. Income from operations reported a strong increase up to $32.5m from $13m.
Speaking at the company’s quarterly conference call, transcribed by seekingalpha.com, Ron DeFeo, Terex Corporation’s executive chairman and chief executive officer, said: "There have been great incremental margins on this business at 46% in Q1 versus the prior year, reflecting the pricing in margin focus that we had put on the business. Rough terrain cranes continue to be the strongest performing product category."
"As predicted, our Australian crane business came down 25%. It’s a very profitable business for us, but tied to the mining industry and tied to commodities. We also have re-segmented, and the North American Services and Utilities businesses have been added to this segment. The utilities operating margin discretely was up 2.3 points year-over-year, which is a nice improvement and there will be a continued emphasis on this business to get its margins up."
"Backlog is weaker than perhaps we would like, but we had a very good Bauma show, encouraged by customer activity, and by the reception to our new products. It’s hard to say whether that backlog would have been higher, had Bauma not occurred in April, but we’re really positive about what we saw. The revenue expectation we have for cranes is probably one of our hardest numbers to achieve, but we’re still pretty positive."
Tim Ford, president of Terex Cranes, also speaking at the conference call, added to the positive feeling the company had in relation to the cranes business. "At the analyst meeting a month ago, I talked about cranes being a business with potential. I would actually characterize it today as being a business with potential that’s turning into momentum."
"If you look at the first quarter order pattern, each month was better than the prior month. So February was better than January, and March was significantly better than February. I’m pretty enthusiastic about the business as we look ahead. We’re coming out of a little bit of a hole, but I feel like the business opportunity is gaining strength, and the momentum is beginning to build so we can turn this potential into real opportunity"
