Terex Construction : Net sales for the Construction segment for the third quarter of 2012 decreased $105.0 million, or 26.6%, to $290.4 million versus the third quarter of 2011. End markets for many of the segment’s products have exhibited significantly softer demand, particularly Western Europe. The global market for material handlers continued to demonstrate softness, and the Company’s trucks and compact construction equipment businesses were also impacted by weakening demand.
Loss from operations in the third quarter of 2012 was $8.3 million, or 2.9% of net sales, compared to a loss from operations of $6.4 million, or 1.6% of net sales, during the third quarter of 2011. Operating results were negatively impacted primarily by lower sales volumes and unfavorable product and geographic mix. These results were partially offset by improved price realization as well as cost savings initiatives taken in 2011 which have continued in 2012. The Company has taken aggressive action to decrease production to match current market demand by implementing shortened work weeks, reductions in force and temporary production shutdowns. Charges of $1.3 million were taken in the quarter related to these actions.
Terex Cranes : Net sales for the Cranes segment for the third quarter of 2012 decreased $22.7 million, or 5.4%, to $394.6 million versus the third quarter of 2011. Adjusting for the translation effect of foreign currency changes, net sales increased approximately 2% from the third quarter of 2011. The Company continued to see strong demand from North America, Australia, South America and the Middle East. Sales into other markets were generally stable compared to the third quarter of 2011.
Income from operations in the third quarter of 2012 was $47.6 million, or 12.1% of net sales, as compared with income from operations of $25.1 million, or 6.0% of net sales, during the third quarter of 2011. Operating results benefited from improved price realization and cost reduction actions implemented in the prior year.