Slow start at Terex Cranes

By Alex Dahm30 April 2013

Net sales at Terex Cranes in the first quarter of 2013 were US$ 471 million, up 4% on the $455 million of the same quarter a year before.

The figure was down 8%, however, on the $511 million of the last quarter of 2012. The slow start to the year was anticipated in the company’s annual guidance, the company said, also that, “Cranes delivered strong operating performance with improving margins.” Rough terrain cranes continue to be the strongest performing product category, Terex said.

Order backlog at $634 million for Q1 2013, was down 1% from the $643 million of the previous quarter and down 18% on the $776 million of the first quarter a year before.

Terex Corporation as a whole reported net sales of $1,723.1 million in the first quarter of 2013, a decrease of 5.3% from $1,819.4 million in the first quarter of 2012. Income from operations was up $4.6 million to $68.4 million from the year before.

“Our business performance was mixed in the first quarter,” commented Ron DeFeo, Terex chairman and chief executive officer. “Our Cranes and Materials Processing businesses also positively contributed to our results and performed generally as expected. However, we have seen significant global revenue shortfalls in our MHPS [Materials Handling and Port Solutions] business, with particular weakness in Europe and India. Our Construction business is also reflecting the challenges of a less certain customer base in Europe. As a result, we are initiating additional actions in the second quarter to further adjust the cost structure of the MHPS and Construction organisations to better reflect the reduced demand for certain of their products. We anticipate that we will be incurring restructuring and related charges of approximately $30 to $50 million in the MHPS segment in the second quarter, and expect to realise a similar amount in savings over the next 12 to 24 months.”

The Utilities business, formerly part of the AWP segment, the Crane America Services business, formerly part of the MHPS segment, and the legacy AWP services business, formerly part of the AWP segment, are now all consolidated within the Cranes segment, Terex said.

Kevin Bradley, Terex senior vice president and chief financial officer, said, “We generated free cash flow in the first quarter of 2013 of approximately $135 million. We are pleased with this result as we normally consume cash early in the year. We continue to anticipate improved cash generation throughout the remainder of the year.”

Return on Invested Capital was 7.7% for the trailing twelve months ended 31 March 2013, Terex said.

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