20.10.2010

Genie back in the black

Terex AWP/Genie has reported a return to profitability in the third quarter and should be back in ‘the black’ for the full year.

Year to date revenues were $729 million an increase of 15 percent on the same period last year. The operating loss was $8.3 million compared to a loss of $121.4 million at this time last year.

The quarterly numbers were even cheerier with revenues up over 41 percent to $280.9 million, while the company made an operating profit of $14.3 million compared to a loss last year of $49.5 million.

The backlog as of the end of September was $273.7 million almost double that of last year and up over 45 percent on the quarter

Terex says that the North American market has begun to recover with order now coming in from US rental companies. South America and Australia continue to show good growth trends, while the telehandler order from the US Marines also contributed to the improvement.

The improved operating results are down to the higher sales volumes and margin and manufacturing cost absorption that resulted from increased production levels, along with a reduction of a provision for foreign import duty on historical shipments for certain products taken in the second quarter.

Terex chief operating officer Tom Riordan, said: “Stable demand and fleet
age issues are leading rental and utility customers to address equipment requirements as evidenced by recent orders. Furthermore, we have successfully captured additional market share in some developing markets and, while the impact is not yet material, we have begun limited production in China. Recent customer meetings have reinforced our confidence in an improved 2011 for AWP.”

Terex Group

Terex as a whole saw revenues for the nine months increase almost nine percent to $3.09 billion while it more than halved its pre-tax loss to $201 million.
For the quarter revenues were up over 15 percent to $1.08 billion. While the pre-tax loss was $51.8 million compared to $133 million in the same quarter last year.

Terex chief executive Ron Defeo said: “Our third quarter operating results were mostly in line with our expectations, but with greater than anticipated Cranes weakness. Our Aerial Work Platforms and Materials Processing results were solid, with positive order and backlog trends."

"Construction had near breakeven operating profit, excluding unusual items, but the European Cranes business fell faster than anticipated. We also had a number of discrete tax charges that, along with the derivative effect of the Bucyrus equity strength, contributed to non-operating expenses."

"We expect the fourth quarter to reflect continued strengthening trends in AWP, Construction and MP, with a weaker Cranes business than we had previously anticipated. Consequently, we expect net sales to increase approximately 10-15 percent sequentially and to generate a consolidated operating profit of roughly $15 million in the fourth quarter, excluding unusual items, although this will not be sufficient to generate net income in the quarter.”

“The mid and longer term expectations for Terex remain unchanged. We are
building the business in each product category, both in developed and developing markets. AWP, Construction and MP customers are upbeat for 2011 and we expect the Cranes business to reach its low point in 2011."

"Although the new Port Equipment business has experienced increased quotation activity recently, we do not expect to see a positive impact from this business until 2012. We are not yet in a position to set overall expectations for 2011, but we do believe it will be a profitable year. In addition, we expect to reinvest our cash in the business, repay additional debt or a combination of both during 2011.”

Vertikal Comment

An encouraging set of numbers from Genie which looks as though it may continue into the new year and beyond. Barring any upsets it looks as though Genie will be able to report a full year operating profit, rather than a loss.

This is the second set of third quarter results from a major aerial lift manufacturer and the second set of quarterly results that are in positive territory.

This is bound to provide some cheer to the rest of the industry, although there is a long way to go yet before we can breathe easily again. At least we appear to be on the way.