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Terex (TEX) Beats on Q4 Earnings Estimates, Plunge Y/Y
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Terex Corporation (TEX - Free Report) reported fourth-quarter 2016 adjusted earnings of 7 cents per share, a 76% plunge from 29 cents in the prior-year quarter, reflecting the challenging global market conditions. However, earnings beat the Zacks Consensus Estimate which was at a loss of 5 cents per share.
Including one-time items, Terex suffered a loss of $2.96 per share in the quarter, faring much worse than the year-ago quarter’s earnings per share of 22 cents.
Operational Update
Revenues in the quarter declined 16.5% year over year to $975 million from $1.17 billion in the prior-year quarter. Nonetheless, revenues beat the Zacks Consensus Estimate of $919 million.
Cost of goods sold decreased 9% to $870 million from $952 million in the prior-year quarter. Gross profit declined 51% year over year to $105 million. Gross margin contracted 770 basis points to 10.7%.
Selling, general and administrative expenses increased 27% year over year to $200.8 million. Terex reported an operating loss of $96 million compared with an operating income of $57 million in the year-ago quarter.
Terex Corporation Price, Consensus and EPS Surprise
The Aerial Work Platforms (AWP) segment posted revenues of $379 million in the quarter, down 17.5% from $459 million in the prior-year quarter. Operating income decreased 56% to $18 million from $42 million in the prior-year quarter.
Revenues from the Crane segment fell 19.5% to $327 million from $406 million in the year-ago quarter. The segment’s operating loss of $280 million was in stark contrast to an operating profit of $20.5 million in the prior-year quarter.
The Material Processing (MP) segment’s revenues were $236 million, down 2% year over year. The segment reported an operating income of $22 million, up 62% year over year.
Financial Position
At the end of 2016, Terex had cash and cash equivalents of $429 million compared with $371 million at 2015 end. The company generated $367 million of cash from operating activities in the year compared with a $212.9 million in the prior year. Long-term debt was $1.56 billion as of Dec 31, 2016, compared with $1.73 billion as of Dec 31, 2015.
Fiscal 2016 Performance
Terex reported adjusted earnings per share of 88 cents in fiscal 2016, down 38% from $1.41 in fiscal 2015, but ahead of the Zacks Consensus Estimate of 76 cents. Including one-time items, Terex reported a loss per share of $1.79 per share compared with earnings of $1.17 in the prior year. Revenues were reported at $4.44 billion, down 11.5% year over year. Revenues beat the Zacks Consensus Estimate of $4.38 billion.
2017 Guidance
Terex expects earnings per share to lie between 60 cents and 80 cents, impact from ownership interest in Konecranes, and other unusual items. Additionally, sales are projected at around $3.9 billion.
Primary global markets will remain challenging. The company anticipates lower fleet replacement demand from North American AWP rental customers. The global crane market remains challenging and is anticipated to deteriorate further in 2017. However, the company will benefit from modest growth in the Materials Processing business, cost reduction actions and capital structure improvements.
In the past six months, Terex has outperformed Zacks categorized Machinery-Construction/Mining sub industry. Terex’s shares have surged 32.7% in the said time frame, coming ahead of the industry’s gain of 19.9%. Investors appreciate the company's efforts to simplify structure and its focus on growth, which is reflected in the company's price performance year to date.
Terex currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the industrial products sector include Kennametal Inc. (KMT - Free Report) , Roper Technologies, Inc. (ROP - Free Report) and II-VI Incorporated . All of these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Kennametal has delivered an average positive earnings surprise of 9.90% in the last four quarters. Roper Technologies has delivered an average positive earnings surprise of 0.92% in the trailing four quarters. II-VI Incorporated has an average positive earnings surprise of 59.23% in the past four quarters.
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Terex (TEX) Beats on Q4 Earnings Estimates, Plunge Y/Y
Terex Corporation (TEX - Free Report) reported fourth-quarter 2016 adjusted earnings of 7 cents per share, a 76% plunge from 29 cents in the prior-year quarter, reflecting the challenging global market conditions. However, earnings beat the Zacks Consensus Estimate which was at a loss of 5 cents per share.
Including one-time items, Terex suffered a loss of $2.96 per share in the quarter, faring much worse than the year-ago quarter’s earnings per share of 22 cents.
Operational Update
Revenues in the quarter declined 16.5% year over year to $975 million from $1.17 billion in the prior-year quarter. Nonetheless, revenues beat the Zacks Consensus Estimate of $919 million.
Cost of goods sold decreased 9% to $870 million from $952 million in the prior-year quarter. Gross profit declined 51% year over year to $105 million. Gross margin contracted 770 basis points to 10.7%.
Selling, general and administrative expenses increased 27% year over year to $200.8 million. Terex reported an operating loss of $96 million compared with an operating income of $57 million in the year-ago quarter.
Terex Corporation Price, Consensus and EPS Surprise
Terex Corporation Price, Consensus and EPS Surprise | Terex Corporation Quote
Segment Performance
The Aerial Work Platforms (AWP) segment posted revenues of $379 million in the quarter, down 17.5% from $459 million in the prior-year quarter. Operating income decreased 56% to $18 million from $42 million in the prior-year quarter.
Revenues from the Crane segment fell 19.5% to $327 million from $406 million in the year-ago quarter. The segment’s operating loss of $280 million was in stark contrast to an operating profit of $20.5 million in the prior-year quarter.
The Material Processing (MP) segment’s revenues were $236 million, down 2% year over year. The segment reported an operating income of $22 million, up 62% year over year.
Financial Position
At the end of 2016, Terex had cash and cash equivalents of $429 million compared with $371 million at 2015 end. The company generated $367 million of cash from operating activities in the year compared with a $212.9 million in the prior year. Long-term debt was $1.56 billion as of Dec 31, 2016, compared with $1.73 billion as of Dec 31, 2015.
Fiscal 2016 Performance
Terex reported adjusted earnings per share of 88 cents in fiscal 2016, down 38% from $1.41 in fiscal 2015, but ahead of the Zacks Consensus Estimate of 76 cents. Including one-time items, Terex reported a loss per share of $1.79 per share compared with earnings of $1.17 in the prior year. Revenues were reported at $4.44 billion, down 11.5% year over year. Revenues beat the Zacks Consensus Estimate of $4.38 billion.
2017 Guidance
Terex expects earnings per share to lie between 60 cents and 80 cents, impact from ownership interest in Konecranes, and other unusual items. Additionally, sales are projected at around $3.9 billion.
Primary global markets will remain challenging. The company anticipates lower fleet replacement demand from North American AWP rental customers. The global crane market remains challenging and is anticipated to deteriorate further in 2017. However, the company will benefit from modest growth in the Materials Processing business, cost reduction actions and capital structure improvements.
In the past six months, Terex has outperformed Zacks categorized Machinery-Construction/Mining sub industry. Terex’s shares have surged 32.7% in the said time frame, coming ahead of the industry’s gain of 19.9%. Investors appreciate the company's efforts to simplify structure and its focus on growth, which is reflected in the company's price performance year to date.
Terex currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the industrial products sector include Kennametal Inc. (KMT - Free Report) , Roper Technologies, Inc. (ROP - Free Report) and II-VI Incorporated . All of these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Kennametal has delivered an average positive earnings surprise of 9.90% in the last four quarters. Roper Technologies has delivered an average positive earnings surprise of 0.92% in the trailing four quarters. II-VI Incorporated has an average positive earnings surprise of 59.23% in the past four quarters.
Zacks' Top Investment Ideas for Long-Term Profit
How would you like to see our best recommendations to help you find today’s most promising long-term stocks? Starting now, you can look inside our portfolios featuring stocks under $10, income stocks, value investments and more. These picks, which have double and triple-digit profit potential, are rarely available to the public. But you can see them now. Click here >>