29.07.2006

Terex Crane sales jump 28%

Terex crane sales jumped to $809 million, and increase of almost 28 percent in the first half of 2006 compared to the same period in 2005.

The company said that improvements were particularly strong in the mobile and crawler crane sectors.

The Chinese truck crane acquisition contributed just over $10 million in the second quarter, or roughly six percent of the first half revenue increase.

Gross margins fell back in percentage terms to 7.8 percent of sales compared to 8.6 percent in the same period of 2005. In actual dollar terms though, the gross margin rose from $76.5 million to $126 million.

Operating income for the crane business was sharply up almost tripling from $21.6 million to $63 million or a healthy 7.8 percent of sales.

The division’s backlog and thus lead times jumped significantly from $315 million in mid 2005 to $807 million at the end of June 2006. Reflecting six months of production at current levels.

“Terex Cranes had an excellent quarter, with strong revenue growth of over 30 percent versus the prior year’s results,” said Steve Filipov, president of Terex Cranes. “The performance improvement was in revenue and, more importantly, in operating profit, where we improved approximately 125 percent over the prior year’s results, which is a tremendous accomplishment. Best of all, the positive performance was broad based, with all product lines contributing significantly to this quarter’s improvements.

Also, during this quarter Terex completed the acquisition of a 50 percent controlling interest in Sichuan Changjiang Engineering Crane Co, Ltd. This positions Terex to more actively participate in the domestic Chinese crane market, a market that comprises a substantial portion of the global growth in equipment sales.”

“It would be easy to step back and enjoy our recent successes; however, the crane market has only recently begun to recover in terms of new equipment demand, and there still exists a supply / demand imbalance in many product ranges. We are working to improve our production rates by improving our supplier base to ensure that our products are the timely, reliable and cost-effective equipment our customers expect”.


“There are stories published every day regarding the massive infrastructure expansion being undertaken globally that will require cranes, among other pieces of equipment. This demand, from China to the Middle East, as well as Europe and a newly recovered North America, is unlikely to soften in the near future, and adds to our confidence that Terex Cranes can achieve a 10 percent operating margin in the foreseeable future.”



Terex group results

Terex Group revenues climbed by almost 20 percent to $3.8 billion, clearly driven by the cranes and access divisions. Gross margins were $722 million, an increase of 48 percent on 2005 in percentage terms margins climbed from 15.2 percent to 18.9 percent.

Net Income after tax was up by almost 95 percent to $198 million.

Ron DeFeo said, “We are raising our outlook for 2006 from our previous guidance provided in May. We now expect sales to be up 17 to 22 percent from our 2005 results to a range of $7.5 to $7.8 billion”.

“We are raising our earnings per share expectations for the year to $3.55 to $3.75 from our previous indication of $3.20 to $3.40 per share, excluding costs related to the early extinguishment of the Company’s 10-3/8 percent senior subordinated notes. The increase in profit expectations reflects continued favorable economic conditions and the internal progress we are making on improving costs, market development, and price realisation.”