03.05.2017

Hard start for Genie

Genie /Terex AWP has reported lower first quarter sales and profits but sharply higher order intake.

Total revenues slipped nine percent to $472.4 although order intake improved 38 percent pushing the company’s backlog up 21 percent. Operating profits plummeted 43 percent to $21.7.

Terex as a whole - now just the three divisions - saw revenues decline almost 10 percent to just over a billion dollars, while pre-tax loss jumped from a loss of $18.1 million last year to $88.6 this year.

Terex chief executive John Garrison said: “We are encouraged by our start to 2017. Our Material Processing segment had an excellent first quarter, growing sales and operating margin. Our Cranes segment results were consistent with our expectation that volumes would be down in the first half of 2017. In Aerial Work Platforms sales were down as expected, and operating margins compressed on lower sales and the strength of the US dollar.”

“Looking forward, we see positive momentum in our backlog, which grew year-over-year for the first time in eight quarters . Overall backlog grew 10%, rising in each of our segments. In particular, the North American market for AWP products is stronger than we anticipated, with positive customer sentiment tempering the impact of the replacement cycle. Year-over-year, AWP backlog grew 21% and bookings rose 38%. In addition, MP backlog grew 29%.”

“We made substantial progress executing our strategy to focus and simplify the Company, and build capabilities in key commercial and operational areas. In January we completed the MHPS sale. We also closed the sale of our loader backhoe business based in Coventry, England, and announced the sale of our India loader backhoe business. Our Cranes restructuring program is making progress, with the closing of our Jinan facility, and we continue to address structural costs. The Commercial Excellence program is providing greater visibility to sales opportunities and helping to improve our bookings and backlog.”

Vertikal Comment

The divisional information released so far is slightly more basic than in the past with only percentages given on order intake and backlog, when it is released we will update.

It looks as though Genie might be suffering a little from having cut production back just as the market has ticked up. Sum of this is related to longer term restructuring, such as the closure of some plants such as Coventry in the UK and capacity will bounce back as the supplier pipeline is cranked up to match improved order intake.

We saw a similar situation for the quarter at JLG, while it will be interesting to see how Skyjack fared, when its results are unveiled next week.