26.04.2010

Terex AWP/Genie slips 4%

Terex Aerial Work Platforms/Genie has posted first quarter revenues of $216 million, just over four percent down on the same quarter last year.

However an overall currency gain masked an underlying drop of nine percent, although order intake improved. The company made an operating loss of $20.3 million, compared to a loss of $39.5 million in the first quarter 2009.

The Terex AWP order book improved by 35 percent on the year and 28 percent on the quarter. The company says that the improvement reflects “a modest degree of ordering that occurred during the first quarter, with demand generally remaining soft, as customers wait to order equipment until needed and the rental channel, focuses on purchasing other types of equipment, namely compact construction equipment.”

The Terex group as a whole saw revenues decline by just over three percent to $935.9 million in the first quarter of 2010, a decrease of $29.9 million, or 3.1%. If currency gains and the new ports business are excluded to show a like-for-like comparison, the fall was 17 percent.

The group posted a pre-tax loss for its ongoing business of $114.2 million, compared to a loss of $136.5 million in the same period last year.

The group did though make a one off gain on the sale of its mining business of
$620.4 million which obviously took it back into strong positive territory for the period.

Terex chief executive Ron De Feo said: “First quarter results were in line with our expectations. Clearly, we had significant gains from the sale of the Mining business, but we also had a stable, but low, level of operating performance from continuing operations. We see tangible signs of an improving environment, with moderately positive order activity in many of our early cycle product categories versus year ago levels. While we believe end markets will not provide much sales volume benefit in 2010, current trends have increased our confidence in a more robust 2011 operating environment.”

“Our expectation for full year 2010 performance heading into this year was for sales to be approximately $5 billion, resulting in breakeven operating performance before interest and taxes, and excluding restructuring and unusual items. While the Atlas sale, in combination with currency exchange rate changes, will likely negatively influence our top line results, we view our operating results this quarter as being in line with our previous outlook. Longer term, we remain focused on our growth goals. Assuming a return to a more normalised economic operating environment, based on the historical performances of our remaining businesses, we believe doubling our revenue, with net income of approximately $6 per share, is achievable by 2013.”

Vertikal Comment

The Terex aerial lift and telehandler business is finally picking up albeit very slowly and tentatively. With capacities reduced at both Genie and most of its suppliers it will not take too much of an upturn to start stretching lead times, while cuts in both operations costs and SG&A expenses could put the company back into the black during the year, possibly as soon as the second quarter.

While comparisons are still negative the situation is clearly improving as indicated by the growing order book.