Terex has revealed that its sales grew by 37.8% to $1.4 billion in Q2 and its operating profit came back into the black at $0.9 million compared to last year’s $13.1 million Q2 loss.
The US-based multi-faceted company has also revealed that it has acquired 73% of the shares and 81% of voting rights in Demag Cranes.
The company’s crane division carried a $33 million charge allocated to a cost reduction initiative and “manufacturing footprint rationalization” into the results which contributed to making a loss of $56.5 million on sales of $862 million.
Elsewhere its AWP division saw its second quarter sales more than double to $484.1 million, with North America and Brazil showing strong growth and western Europe strengthening. This division made an operating profit of $28.2 million someway ahead of 2010’s $2.3 million loss.
The company cited “manufacturing inefficiencies” at some facilities, as well as supplier shortages and increased costs from suppliers as factors in limiting the profitability of the division. CEO Ron DeFeo suggested that the company is expecting better margins from AWP later in the year.
“AWP costs, both material and headcount, caused some disappointment in our margin performance for this segment”, said DeFeo. “Our previously announced 4.5% price increase in AWP should begin helping our performance in the second half of 2011.”
The AWP results may be seen as a mix bag for the company. The division’s $447.8 million backlog was similar to the quantity seen at the end of the previous quarter. The company explained that major orders had been placed earlier in the year than is normal. AWP’s results were also boosted by revenue from the decoupling of its US utility boom rental fleet.
Demand from Russia and developing economies in Latin helped Terex’s Construction division to a 29.5% increase in sales and $361.3 million in revenue for Q2.
DeFeo said this was: “driven by strong demand for material handlers and increased demand for trucks, especially in developing markets like Russia and Latin America.”
The company explained that it was experiencing increasing demand for compact equipment in the rental channel in the Americas and high demand for backhoe loaders in Northern Europe and Russia. This was offset by a reining back of infrastructure spending and road building equipment demand, particularly in Brazil.
“We have made progress during the first six months of 2011, but there is still significant work in front of us,” said DeFeo, “We had strong performance in terms of order and sales activity in the second quarter but supplier constraints on component deliveries and other operational challenges caused operating margins to be below expectations.”
