Terex Corporation, Westport, Conn., reports that the second quarter of 2012 was strong for cranes and aerial work platforms, and the two segments are expected to offset other potential shortfalls in the company.
“We had a strong second quarter,” said Ron DeFeo, Terex chairman and CEO. “This year’s focus has been to improve margins, generate cash and integrate Demag Cranes AG. We are on or ahead of expectations in these categories. Margin improvement resulted from better price realization and cost discipline. We generated free cash flow of approximately $155 million primarily from profit improvement. The integration team has identified and is beginning implementation of improvement opportunities and realizing synergies.
He added that the Aerial Work Platforms (AWP) and Cranes segments had strong performances and are well positioned for continued improvement in the second half of the year. Additionally, the Construction segment returned to profitability for the first time since 2008., and Materials Processing continued their positive trend.
“Overall, we believe the strength in our AWP and Cranes segments, as well as in North America and select other markets like Australia, will offset the weakness we expect to experience in certain markets during the second half of the year,” he said.
For the company, net sales were $2.0115 billion in the second quarter of 2012, an increase of 35.2 percent from $1.4882 billion in the second quarter of 2011. Excluding the impact of the acquisition of Demag Cranes AG, net sales increased approximately 11 percent from the comparable prior year period. Adjusting for the translation effect of foreign currency exchange rates, net sales increased approximately 40 percent from the comparable prior year period and 16 percent, excluding the acquisition.
Net sales for Terex Aerial Work Platforms increased $120 million (24.7 percent) in Q2’2012 to $605.7 million, versus the second quarter of 2011. The company continued to see increased replacement-based demand in North American rental for its aerial work platform products. The Australian market also continued to be a relatively strong contributor, due to natural resource-based construction spending.
Net sales for the Cranes segment for the second quarter of 2012 increased $20.1 million (4.3 percent) to $484.2 million versus the second quarter of 2011. Adjusting for the translation effect of foreign currency exchange rates, net sales increased approximately 12 percent from the comparable prior year period. Strong demand for rough0terrain cranes and improving demand for all-terrain cranes continued in North America, the Middle East and Latin America, as well as general strength in Australia.
Effective July 1, 2012, the port equipment business currently reported as part of the Cranes segment will be consolidated within the MHPS segment. Excluding the port equipment business results, the operating margin for the Cranes segment would have been approximately 11 percent in the second quarter of 2012.
Net sales for the Terex Material Handling & Port Solutions segment for the second quarter of 2012 were $361 million. Net sales are generally on track for port equipment and services, but are somewhat behind expectations in the industrial cranes business. Net sales generated by the segment’s service component was particularly strong in North America.
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