Terex reported net sales of $1.8 billion for 3Q 2014, up 3 percent from 2013. Income from continuing operations fell 30 percent to $58.7 million, down from $84.5 million. Income from operations was $116.8 million, down 15 percent compared to 2013.
“Our results for the third quarter were in line with the revised guidance communicated in mid-September,” said Ron DeFeo, chairman/CEO. “Our Cranes segment met our lowered expectations for the quarter as end markets remain challenged. However, despite continued market environment challenges, we are anticipating sequential improvement from Cranes in the fourth quarter.
"While our AWP business is performing well, we had planned for a stronger second half of 2014 than has materialized which has put pressure on margins. AWP profitability was further negatively affected by currency movements late in the quarter, primarily the Brazilian Real, higher commodity costs and continued manufacturing startup costs related to the production of telehandlers at our Oklahoma City facility. As a result, we removed approximately 500 team members from AWP in the third quarter, which will aid in the return to more normal mid-teens margins within the next 12 months.
"Our MHPS segment had a strong improvement in profitability, excluding the reserve we booked related to the planned closure of a manufacturing facility and production relocation. We are taking this action to improve the efficiency of our manufacturing footprint.
"Our Construction segment performed as we expected.
"Our Materials Processing segment had a weak margin quarter as it experienced unfavorable geographic and product mix and our investments in new growth initiatives have yet to deliver increased net sales.”
“Predicting market improvements has been challenging and in the near term we will be assuming flat markets and only performance improvements that we can control,” DeFeo said. “Consequently, we now expect our annual outlook for earnings per share to be at or near the bottom of our previously announced range of $2.35 to $2.50, excluding restructuring and other unusual items, on net sales of between $7.3 billion and $7.5 billion. Looking forward, we have identified improvement opportunities from cost reduction actions, interest expense declines and tax rate improvements. We think we can accomplish these in the next two years to provide meaningful improvement in our earnings per share even in a flat market.”