31.10.2017

Stronger quarter for Genie

Genie has reported a strong third quarter with a sharp rise in both sales and profits. The amouint of detail released so far is limited with a full presentation scheduled for tomorrow.

Starting with the year to date numbers, revenues for the nine months to the end of September were just 1.5 percent higher at $1.62 billion while pre-tax profits dropped 12 percent to $140 million.

The third quarter was far more positive than the first half, with revenues jumping 15 percent to $556.7 million, and operating profits rising 18.5 percent to $57.5 million. We understand that the order book at the end of the period was significantly higher than at the same point last year - but details have yet to be published.

Terex as a whole saw nine month revenues fall four percent to $3.3 billion, but managed to more than double pre-tax profits to $86.6 million. Third quarter revenues were almost five percent higher at $1.11 billion, while pre-tax profits were quadrupled to $56.7 million.

Terex chief executive John Garrison said: “Our third quarter financial results demonstrate the accelerating momentum across Terex. All three segments increased sales, improved operating margin and grew backlog. Aerial Work Platforms grew in North America and Europe, and expanded its operating margin. Cranes continued to be profitable in the third quarter, realising benefits from its restructuring programme. Materials Processing continued its excellent performance, growing sales and operating margin for the fourth consecutive quarter.”

“Having completed the first element of our strategy - focusing the portfolio on our three core segments, our strategy deployment efforts are concentrated on simplifying the Company and implementing our Execute to Win business system. Footprint consolidation progress in the quarter included completing the sale of manufacturing locations in Jinan, China and Bierbach, Germany. A fundamental component of Execute to Win is improving our commercial capabilities. In addition to enhancing our performance management tools and increasing process discipline in sales pipeline and account management we made key additions to our commercial leadership team.”

“We continue to follow our disciplined capital allocation strategy. We monetised our remaining holdings of Konecranes shares for proceeds of $221 million, bringing the total consideration received by Terex for the disposition of MHPS to approximately $1.6 billion. This demonstrates the significant value to Terex shareholders that was created by the sale of our MHPS segment. In addition, we repurchased 6.4 million Terex shares for $254 million in the third quarter, bringing the total to 22.3 million shares repurchased for $770 million for the first nine months of the year.”

“Considering our year to date results, our current view of market dynamics, operational expectations for the fourth quarter, and our capital market actions, we are increasing our full year adjusted earnings per share guidance to $1.20 to $1.30.”

Vertikal Comment

While the year to date results are lacklustre, the third quarter shows how the market is improving at the same time that Genie is beginning to build some solid momentum. Expect the positive trend to continue in the fourth quarter, with the company in good shape for a really good year in 2018.