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Terex announced first quarter net sales of $1,819.4 million, an increase of 44.8% from $1,256.2 million in the first quarter of 2011. Excluding the impact of the acquisition of Demag Cranes, net sales increased approximately 16% from the comparable prior year period.
“We are pleased that 2012 is developing as planned,” stated Ron DeFeo, Terex chairman and CEO. “Overall, net sales were consistent with our expectations. North America was a strong market for most product categories, with the exception of our roadbuilding products. We believe the global business environment continues to support growth and increased equipment sales. Although the Chinese market has softened somewhat, this was not unexpected and was built into our expectations for the year. We continue to be cautious about European markets where economic activity has been strong in some areas and weak in others.”
DeFeo says several segments showed growth, including aerial work platforms and material handling. “Our construction segment is on target for the year, with a breakeven first
quarter and a backlog and order book that supports a profitable second quarter.”
DeFeo added, “We are focused on executing the plan we articulated in February, namely achieving in 2012 approximately $475 to $525 million in operating profit and earnings per share of $1.65 to $1.85 per share (based on an average share count of approximately 116 million shares and excluding the impact of restructuring and unusual items) on sales of $7.5 to $8.0 billion.”
Terex Aerial Work Platforms: Net sales for the AWP segment for the first quarter of 2012 increased $135.2 million, or 35.7%, to $513.4 million versus the first quarter of 2011. Terex continues to see recovery in the North American rental channels for its aerial work platform products with demand continuing to strengthen. The Australian market also continued to demonstrate strong sales growth.
Income from operations in the first quarter of 2012 was $42.6 million, or 8.3% of net sales, as compared to income from operations of $5.7 million, or 1.5% of net sales, during the first quarter of 2011. Operating profit benefited primarily from increased volumes and pricing. These increases were partially offset by higher input costs.
Terex Construction: Net sales for the construction segment for the first quarter of 2012 increased $21.6 million, or 6.3%, to $363.1 million versus the first quarter of 2011. Truck and component part sales were significant contributors to the year-over-year increase, particularly to the developing markets in Russia, Africa and China. Terex continues to see a lack of government infrastructure spending in North America and Brazil, which negatively impacted the roadbuilding business.
Income from operations in the first quarter of 2012 was breakeven, as compared to a loss from operations of $3.2 million, or 0.9% of net sales, during the first quarter of 2011. Operating results benefited from the cost savings initiatives taken during 2011. The profitability of several of the company?s construction businesses were offset by losses incurred in the roadbuilding business.
Terex Cranes: Net sales for the cranes segment for the first quarter of 2012 increased $21.1 million, or 5.3%, to $419.4 million versus the first quarter of 2011. North American businesses continued to exhibit strong demand, primarily for rough terrain cranes. Terex also experienced good demand for its pick and carry cranes in Australia and certain port equipment products. Crawler crane sales remained soft in Europe as austerity measures have impacted large construction and power projects that typically use this type of product.
Income from operations in the first quarter of 2012 was $7.3 million, or 1.7% of net sales, as compared with a loss from operations of $22.5 million, or 5.6% of net sales, during the first quarter of 2011. Operating results benefited from restructuring activities that were taken during 2011, increased volumes and improved product mix, both in the current year period, as well as a $5 million charge for a customer insolvency in the first quarter of 2011. Partially offsetting this was a charge of approximately $12 million in our port equipment business in the current year period related to the write down of an acquisition related receivable.
Terex Material Handling & Port Solutions: Net sales for the MHPS segment for the first quarter of 2012 were $367.5 million. Net sales were driven by demand for industrial cranes, primarily process cranes and handling technology, and mobile harbor cranes. High customer capacity utilization led to increased field service and spare parts sales. Customers in Germany and the United States were the largest drivers of net sales in the quarter, followed by India and China.
Income from operations was $2.9 million. Operating results were positively affected by strong machine sales, especially higher margin port equipment, as well as spare parts, service and maintenance revenue. Operating performance improved sequentially as the step-up in the valuation of inventory that took place in 2011 did not recur in the current period. The operating results also were impacted by an allocation of approximately $6 million of corporate costs in the current period that was not included in prior periods.
Terex Materials Processing: Net sales for the MP segment for the first quarter of 2012 increased $17.0 million, or 11.2%, to $169.2 million versus the first quarter of 2011. Strength in the North American market was the primary driver of the net sales increase, while demand in Western European markets remained soft. Increased mining and construction activity continued to drive demand for mobile crushing and screening equipment in Australian and Asia Pacific markets.