Terex Corporation announces third quarter 2016 income from continuing operations of $33.3 million, or $0.31 per share, on net sales of $1.1 billion. In the third quarter of 2015, the reported income from continuing operations was $30.3 million, or $0.28 per share, on net sales of $1.3 billion. Excluding after-tax charges of $3.9 million from restructuring and related actions, $5.3 million from divestiture related activities, and certain tax benefits of $22.0 million, income from continuing operations as adjusted for the third quarter of 2016 was $20.5 million, or $0.19 per share. This compares to income from continuing operations as adjusted of $48.3 million or $0.44 per share in the third quarter of 2015.
“Our Aerial Work Platforms (AWP) and Materials Processing (MP) segments performed in line with expectations, while our Cranes segment performance was negatively impacted by more challenging markets than we anticipated and operational factors,” says John L. Garrison, Terex President and CEO.
Garrison continues, “The global capital equipment market remains challenging. AWP equipment sales continued to soften globally, particularly in North America. The market for mobile cranes weakened further than planned in the third quarter, with the primary driver being the retrenchment in the oil and gas sector in North America and legislative changes to subsidies in the German wind energy industry. We are taking actions to improve the Cranes business including the recently announced leadership changes. In our MP segment, we saw mixed results with increasing backlog for mobile crushing and screening and concrete equipment, while the market for material handling equipment remained weak due to low steel scrap prices.
“We are reviewing all aspects of our cost structure and have been taking actions throughout the entire company to reduce costs. These savings were critical to at least partially offsetting challenging conditions in our markets,” states Garrison.
He adds, “We further tightened the focus of our portfolio with the sale of our German Compact Construction business, and are progressing toward the planned completion of the MHPS sale in early 2017. We are also moving forward with the evaluation and simplification of our manufacturing footprint. During 2016, we successfully moved our mobile crane production from Waverly, IA, to Oklahoma City, OK. Our AWP segment is consolidating scissor manufacturing from three locations to two, and reducing its overall manufacturing footprint including its main campus in Redmond, WA. AWP also closed its facility in Stockton, CA, and recently announced plans to close its Waco, TX, facility, consolidating into Oklahoma City.
“Given the market dynamics and the challenges we are facing in our Cranes segment, we expect our full-year earnings to be $0.70-$0.80 per share, excluding the restructuring and other unusual items and to generate free cash flow of $150 to $200 million,” Garrison concludes.
