Terex Corporation (NYSE: TEX) today announced income from continuing operations of $83.6 million, or $0.75 per share for the second quarter of 2012, as compared to income from continuing operations of $0.9 million, or $0.01 per share for the second quarter of 2011. Excluding the impact of restructuring and other costs and the gain on the sale of Bucyrus International shares, income from continuing operations as adjusted in the second quarter of 2011 was $0.10 per share. The glossary at the end of this press release contains further details regarding these items. There were certain items in the second quarter of 2012 that, in the aggregate, did not have a significant impact on income from continuing operations.
Net sales were $2,011.5 million in the second quarter of 2012, an increase of 35.2% from $1,488.2 million in the second quarter of 2011. Excluding the impact of the acquisition of Demag Cranes AG, net sales increased approximately 11% from the comparable prior year period. Adjusting for the translation effect of foreign currency exchange rates, net sales increased approximately 40% from the comparable prior year period and 16% excluding the acquisition. Income from operations was $175.0 million in the second quarter of 2012, an improvement of $168.2 million when compared to income from operations of $6.8 million in the second quarter of 2011. Excluding the impact of restructuring and related items in the second quarter of 2011, income from operations as adjusted was approximately $43 million.
All results are for continuing operations, unless stated otherwise. Results for Demag Cranes AG are reported as the Material Handling & Port Solutions (MHPS) segment. All per share amounts are on a fully diluted basis.
“We had a strong second quarter”, commented 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.Mr. DeFeo continued, “We are pleased with how the Company performed this past quarter. Our historical businesses continued to grow with improved price realization and reduced expenses (both manufacturing and SG&A) due to actions taken in the prior year. Consequently, the overall operating margin increased significantly to 8.7%, and to 9.9% excluding the Demag Cranes AG acquisition. Our Aerial Work Platforms (AWP) and Cranes segments had strong performances and are well positioned for continued improvement in the second half of the year. 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.” Mr. DeFeo added, “In evaluating the second half outlook, we are encouraged by the balance in our business and despite concerns in Europe and foreign currency headwinds we expect to achieve earnings for the full year of $1.95 to $2.05 per share (based on an average share count of approximately 114 million shares and excluding the impact of restructuring and unusual items) on sales of $7.5 to $7.8 billion. This outlook includes approximately $0.05 per share cost in the second half of 2012 for the guaranteed payment to the minority shareholders of Demag Cranes AG, pursuant to the Domination and Profit and Loss Transfer Agreement (DPLA).”
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