26.04.2010

Terex Cranes down 6.6%

Terex cranes has reported first quarter revenues of $413.7 million, a fall of 6.6 percent compared to last year.

A like-for–like comparison which strips out sales from the recently acquired ports business along with currency gains reveals a fall of 29 percent due to slower All Terrain crane sales.

Terex says that demand for high capacity crawler cranes remained strong, while tower crane and Rough Terrain crane sales remained stable, although at low levels.

The business posted an operating loss of $3.1 million for the quarter, compared to a profit of $29.6 million last year.

The crane backlog decreased 38 percent compared to March 31, 2009, and 16 percent on the quarter. If the Port Equipment business is taken into consideration the like-for like backlog decreased around 50 percent on the year.
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 company 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 crane business has, until now, held up relatively well in comparison to other parts of Terex, although All Terrain sales have finally been hit after holding up through the early part of the slowdown. Terex may also have suffered from delays in the availability of new products such as the 1,000 tonne AC1000 and the long boom 100 tonee AC100-4, with the late arrival of the former having left Liebherr to ‘clean up’ with its LTM 11200.

Terex is benefiting though from its strong reputation in the big crawler crane market and says that it is also seeing increased demand in its new port business which it acquired from Fantuzzi. Both of these factors, along with the overall improvement in crane rental company confidence over the quarter could easily see the operation bounce back into the black in the year as a whole.

The company has also had a relatively good Bauma which may help boost its fortunes during the year?