25.10.2007

Genie sales slower

Terex Aerial Work Platforms, largely the Genie aerial lift and telehandler business has reported revenues for the first nine months of 2007 up by just over 11 percent to $1.75 billion

Income from operations over the same period rose by 24 percent to $358 million, thanks to higher gross margins and a favourable exchange rate against the Euro and Sterling.

Revenues in the third quarter show signs of slowing overall with sales up by a modest two percent when currency factors are stripped out.

The company says that the North American market for aerial lifts was flat being roughly the same as last year, while telehandler sales dropped sharply.

The decline in US sales was more than compensated for by a 46 percent increase in sales to Europe.

Part of a solid margin improvement over the period is due to lower margin telehandler sales being replaced by higher sales of boom lifts which carry a significantly better margin.

The Aerial lift order book at the end of September was 64 percent up on last year, but down 18 percent on what it was as of June 30th.

Most of the current backlog is apparently international as Terex says ”Aerial Work Platform orders for North American deliveries in 2008 have not yet been accepted pending completion of discussions with customers regarding their 2008 planning.”

In addition to the company’s plans to commence the production of scissor lifts at a plant in Coventry, Genie is looking into establishing a production facility in China to produce product for the Asian markets.

The Terex group as a whole reported nine month revenues of $6.55 billion, an increase of 17 percent over the same period of 2006. Net income rose by over 47 percent for the nine months to $440 million.

Ron DeFeo, Terex’s chairman and chief executive officer said: “Our third quarter results reflected a continuation of the many trends we have seen develop over the past few quarters,”

“The underlying story of strong global demand for our products remains intact, contributing to our positive outlook for Terex’s future financial performance. However, the challenge of shortages in component deliveries impacting production output, capacity constraints on certain of our products and a softer North American marketplace for certain products continue to weigh on our business. Overall, we feel our ability to improve our franchise during these generally favorable market conditions is getting stronger.”

“We continue to invest in our business with a focus on long-term benefits to our customers and investors. Our operating expenses have increased versus year ago levels, but these are necessary expenses targeted at improving our capabilities in multiple areas, such as supply management, marketing, global sales and service, information technology and financial services. We will continue to increase our investment in these areas in the future, and we expect that benefits from these investments will become more visible.”

“Our overarching message today is that we are a Company that is poised for continued strong and profitable growth,” said Mr. DeFeo. “We are committed to achieving our previously stated objective of $12 billion in sales and a 12 percent operating margin by 2010. We anticipate that acquisitions will be a part of this growth strategy, and with the recent volatility in financial markets, we are uniquely positioned to take advantage of opportunities as they arise, as well as continuing to invest in expanding our infrastructure in developing economies.”