10.02.2011

Pick up at Terex Crane

Terex cranes has reported a modest improvement in fourth quarter revenues with lower profits.

Crane revenues in the fourth quarter were up 1.8 percent to $549 million while operating income was cut almost in half to $15.7 million.

The quarter was helped by the shipment of cranes that were originally scheduled to ship in the third quarter. Order intake improved across the business, with the exception of small All-Terrain and tower cranes.

The North American Rough Terrain cranes business saw a sharp increase in orders and shipments in the quarter, and they were able to ship to meet this rising demand. Production rates for the North American crane business have been increased to maintain availability. Lattice boom crawler crane sales remained soft, as projects, such as wind energy, continue to be delayed due the economy.

Revenues for the full year were $1.78 billion - down six percent on last year with operating income coming in at just a third of last year’s levels at $33.5 million. The port equipment business reported a loss of $5.4 million as it continued to work through its restructuring plan.

The crane order book increased by 15 percent over the quarter but is still almost 20 percent down on the same point in 2009.

Terex Group

Terex as a whole saw revenues for the year climb almost 15 percent to $4.4 billion with a pre-tax loss of $238.3 million compared to $523.8 million last year.

Terex chief executive Ron DeFeo said: “For Terex, 2010 was clearly a transitional year as we rebounded from the trough levels of 2009 and completed the sale of our Mining business. We have seen order rates accelerate throughout 2010 for most of our businesses, including a recent sequential upturn in order rates in our Cranes segment as we secured several large contracts in the fourth quarter for longer term delivery schedules.”

“Markets in Latin America, India and China are driving large crane and off-highway truck equipment demand. Markets such as the Americas and Western Europe have shown a marked rebound in demand for smaller equipment, namely aerial work platforms in the United States and compact construction equipment in Germany, central European countries and Latin America.”

“On the operations front, all of our segments increased net sales this past quarter on both a yearly and sequential basis, and three of our four segments had positive income from operations. With increases in backlog and order quotation activity, we are starting to see some positive operational catalysts. We have increased production across most of our segments and anticipate further increases throughout 2011 to match the anticipated heightened demand for our products. Although costs associated with increased production will also rise, we anticipate net sales and our income from operations will outpace these costs on a consolidated basis.”

“An improving business environment does not come without challenges, and
we continue to face a recovery that brings competitive pricing, as well as increasing supply costs for components and raw materials. In the face of these factors, we remain committed to our investments in critical improvement initiatives. Specifically, we will continue to implement changes driven by the Terex Business System, the framework around which we are building our capabilities as a superb operating company, that we anticipate will deliver value in the coming years through improved capacity, response time, customer service and quality.”

“The foundation of a business recovery has become visible to us, although we are in the early stages. As anticipated, we see improved demand in our early cycle product categories of Aerial Work Platforms and Materials Processing. Our Construction segment is seeing positive demand from certain markets, such as Central Europe and Brazil.”

“Our Cranes segment is experiencing some short term weakness, but the
mobile crane product offering has stabilized. While we expect Cranes to be an improving story as we move through the year, many of our large crane orders, both in mobile cranes and port equipment, will not ship until the latter part of 2011.”