Terex Corp.'s (TEX) first-quarter profit slumped 98% absent a
big prior-year asset sale gain, although the equipment maker
reported sales growth that exceeded Wall Street's expectations and
higher gross margins.
The company, which makes specialized equipment such as tower
cranes and rock crushers, backed its full-year earnings forecast
but raised its revenue outlook to $5.2 billion to $5.5 billion, up
from the prior view of $5 billion to $5.4 billion.
High raw material costs and continued weakness in the
construction and industrial sectors have dragged on Terex's bottom
line, though the company has forecast a return to profitability
sometime this year. A recent management shakeup included the
January departure of Chief Operating Officer Thomas Riordan, who
left to work for another manufacturer.
It was the second time in the past 10 quarters Terex managed to
post a profit, although last year's results benefited greatly from
Terex's $1.3 billion sale of its mining-equipment business to
Bucyrus International Inc. (BUCY). Terex last year also sold its
Atlas construction excavators business to a private investor.
The company intended to use proceeds from the Bucyrus sale for
additional acquisitions but has so far been unable to complete any
deals and is likely to use a significant portion of the money to
pay off debt.
On Wednesday, Terex posted a first-quarter profit of $11.7
million, or 10 cents a share, down from $539.9 million, or $4.98 a
share, a year earlier. The prior-year quarter benefited from a
$5.72 per-share gain from the sale to Bucyrus. Terex's earnings
from continuing operations was 4 cents a share, compared with a
loss of 73 cents a year earlier.
The company in February predicted a loss of 10 cents to 15 cents
a share.
Revenue grew 34% to $1.26 billion, above the $1.13 billion
projected by analysts polled by Thomson Reuters.
Gross margin widened to 13.3% from 10.5% as margins climbed
across every business but the cranes segment.
Sales in the cranes unit also fell 3.7%, although revenue surged
68% for construction. The aerial work platforms business posted a
75% jump in sales.
As of March 31, total backlog was 46% higher than a year ago and
up 38% from the fourth quarter at $1.79 billion.
Shares were up 2.2% to $33.40 in after-hours trading.
-By Drew FitzGerald, Dow Jones Newswires; 212-416-2909;
Andrew.FitzGerald@dowjones.com
--John Kell contributed to this article.