Terex reported a loss from continuing operations of $2.1 million in 1Q 2015, compared to income of $32.6 million in 1Q 2014.
“Our overall results were weighed down by lower margins in our AWP segment and an unusually high tax rate,” said Ron DeFeo, chairman/CEO. “"Although our tax rate was unusually high in the quarter due to the mix of earnings and losses by country, we expect our full year tax rate to be consistent with the guidance we provided in February,” he said. The company said the higher tax rate was primarily due to the "impact of losses not benefitted combined with lower profit before tax," and expects the 2015 effective tax rate to be between 30 percent and 32 percent.
"Labor issues at the West Coast ports, severe weather conditions in some regions in the U.S. and uncertainty surrounding oil and gas caused our AWP segment to have a slow start to the year," DeFeo said. "Currency exchange rates, an unfavorable product mix of fewer booms and more telehandlers, and higher factory production rates in the prior year first quarter, also negatively impacted the year over year margin comparison. Importantly, our AWP segment exited the first quarter with a meaningfully higher operating margin run rate than its overall margins for the quarter. This, coupled with a strong backlog gives us confidence that AWP will return to more normalized operating margins in the second quarter.”
Net sales for the quarter were $1.496 billion, down from $1.655 billion in 2014. Income from operations was $44.2 million, compared with $75.0 million in 2014.
"Operationally the first quarter was generally in-line with our expectations in most of our businesses, and we are encouraged by our order and backlog trends," DeFeo said. Terex reported backlog for the next 12 months of $2.14 billion, up 7 percent from December, down 9.4 percent from 1Q 2014.
"Our Materials Processing business had a reasonable start to the year in what is traditionally a seasonally softer quarter for sales in this segment," DeFeo said. "While both the MHPS and Construction segments had an operating loss in the quarter, we continue to anticipate improving operating results from these businesses for the balance of 2015. Our Cranes segment performed generally as planned for the first quarter. The order trends and product mix in backlog for this segment continue to suggest improvements as the year progresses.