Terex Corp. released its second quarter 2017 financial report, sharing that Terex Cranes has returned to profitability, and the segment’s backlog increased 29%.
revealing its income from continuing operations was $95.4 million, or $0.98 per share, on net sales of $1.2 billion. In the second quarter of 2016, the reported income from continuing operations was $109.6 million, or $1.00 per share, on net sales of $1.3 billion.
Excluding a net after-tax benefit of $47 million largely related to the investment in Konecranes shares, income from continuing operations, as adjusted, for the second quarter of 2017 was $49.6 million, or $0.51 per share. This compares to income from continuing operations, as adjusted, of $60.6 million or $0.55 per share in the second quarter of 2016.
“We continue to make progress,” said John Garrison, Terex president and CEO. “Our Cranes segment returned to profitability in the second quarter, realizing benefits from its restructuring program. Our Materials Processing (MP) segment continued its excellent performance, growing sales and operating margin for the third consecutive quarter. Aerial Work Platforms (AWP) sales were better than expected on the strength of the North American market, however, operating margins compressed on pricing dynamics, higher steel costs and the strength of the U.S. dollar.”
The backlog in the three segments grew substantially, up 36% year-over-year. It is the second consecutive quarter for Terex to have an increased backlog in each segment. AWP backlog grew 46%, MP backlog was up 33%, and Terex Cranes backlog increased 29%.
“We continue to implement our strategy to focus and simplify the Company, and build capabilities in key commercial and operational areas,” Garrison said. “By completing the sales of our U.K. and Indian backhoe loader businesses, we delivered on our commitment to focus our portfolio on our three core segments. In Germany, we signed an agreement to sell our Cranes manufacturing location in Bierbach, and reached agreement with the Works Council to proceed with our footprint rationalization and cost reduction plans. Our ongoing efforts to expand our capabilities in sales execution and account management through our Commercial Excellence initiative is starting to be reflected in our growing bookings and backlog.”
He also noted that the company monetized $277 million of Konecranes shares for a year-to-date total of $549 million. It repaid the $254 million remaining on the 6.5% notes and repurchased 9.4 million Terex shares for $316 million, bringing the total to 15.9 million shares for $517 million for the first six months of the year.
Mr. Garrison concluded, “Combining our first half results, with our current view of market and operational expectations in the second half and our on-going capital market actions, we are increasing our full year adjusted EPS guidance to $1.05 to $1.15. This reflects improved net sales and operating profit guidance.”