18.02.2015

Quarterly profit jump at Terex Cranes

Terex Cranes has reported a solid increase in profits for the fourth quarter on slightly lower revenues.

Total revenue for the year was down seven percent at $1.79 billion, while operating profits fell over 22 percent to $85.9 million. The backlog at the end of the year was $538.5 million up more than seven percent on the year. Revenues were largely affected by slower sales in North America and Australia.

In the fourth quarter revenues continued to slip, falling around 1.5 percent to $474.3 million, while operating profits jumped almost 35 percent to $34.6 million.

The overhead and port crane business is continuing to improve, with sales up five percent for the year to $1.78 billion. While the operating loss was reduced from $41.8 million last year to $17.2 million in 2014.

Terex as a whole saw revenues increase over three percent to $7.3 billion, with a pre-tax profit of 297.2 million just over two percent up on the year. Net debt was cut by around $258 million to $1.3 billion.

Chief executive Ron DeFeo said: “Terex continued to improve in 2014 despite a more challenging operating environment than anticipated entering the year. We have streamlined our business portfolio, reduced our cost structure, introduced innovative new products, and simplified operations. There is more work to do, but overall we are pleased with the progress we have made and the momentum of our internal improvement initiatives.”

“Operationally, performance was mixed during 2014, and the fourth quarter was no exception. Our Cranes and Materials Handling & Ports Solutions (MHPS) segments had meaningful adjusted operating profit increases in the fourth quarter, while our Aerial Work Platforms segment was substantially below the prior year.

Vertikal Comment

An encouraging fourth quarter suggest that the Cranes business is beginning to turn the corner, sales of its new products are beginning to gather pace after a little bit of a faltering start and profitability certainly seems to be on the rise. Lower oil prices will of course give room for concern, given the importance of this market sector in recent years.

It is hard to say how 2015 will go given all the uncertainties, but the company seems to have made some solid progress and should do better at least in terms of the bottom line.