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TheStreet Open House

Terex's CEO Discusses Q1 2012 Results - Earnings Call Transcript

Net sales for the quarter increased 45% or 16% excluding the impact of the MHPS acquisition. All segments contributed positively. Price, pricing actions and cost progress is on track, and importantly we achieved an adjusted $0.29 of earnings per share which Phil will summarize in detail in a couple of minutes.

Turning to Page 4 and a bit more about our markets and the environment, if you look at where our net sales came from in the first quarter, we had 37% from North America, reflecting the rebound of the aerial work platform and crane businesses. Western Europe represented only 28%, Asia 10%, Latin America 7%, and 18% other, really reflecting the fairly broad diversification of our revenue geographically. This is something we’ve been working on for many years and it’s good to see, frankly.

By segment, our AWP segment was actually our largest segment this quarter with 28% of our revenue, construction 20%, cranes 23%, MHPS 20%, and materials processing 9% - another solid diversification representation on our business by product type. Discussing each segment, our AWP business continues to experience the recovery in the North American rental channel that we’ve all anticipated, as well as strength in Australia. Importantly, we see independent companies returning to purchase equipment again as they represented almost 40% of our sales in the quarter.

We continue to see strength in our boom and scissor product lines. In our construction segment, the Terex rigid and articulated truck sales were quite strong globally and the outlook here remains quite positive. We have seen some slowdown in our materials handling or scrap handling product lines as steel prices have moderated somewhat, and this is pretty typical and standard for this product category across the cycle. The North American and Brazilian road building businesses continue to lag.

Turning to cranes, our rough terrain crane demand is accelerating, especially in the Americas and in the Middle East. Australia energy-related customers continue to drive growth. Our crawler crane demand has been somewhat soft in western Europe, and as is indicated, the Chinese crane JV, that truck crane JV that we had previously discussed, was restructured in the first quarter with a new partner. The partner is a large state-owned company named SINOMACH that we believe is an important partner for our future. They want this product as part of their portfolio. We also expect to have substantial export opportunities that Terex will lead. This, we believe, will be a good, balanced JV for the future where the JV partner here is committed to the business, where previously our JV partner really was not and was a private investor.

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