Terex Construction : Net sales for the Construction segment for the fourth quarter of 2012 decreased $142.6 million, or 34.9%, to $266.4 million versus the fourth quarter of 2011. The Company continued to see weakness primarily due to weak order intake earlier in 2012 for various types of construction equipment, particularly with softness in material handlers resulting from low steel scrap prices and decreased utilization on existing equipment. The Company’s compact construction equipment in Western Europe and rigid trucks in developing markets also experienced decreased sales when compared with the same period in 2011.
Loss from operations in the fourth quarter of 2012 was $44.9 million, or 16.9% of net sales, compared to a loss from operations of $2.8 million, or 0.7% of net sales, during the fourth quarter of 2011. Operating results were negatively impacted with a fourth quarter charge of $33 million related to the decision to exit or sell certain compact construction component manufacturing businesses in Germany and roadbuilding businesses in the U.S. and Brazil. Lower sales volumes, partially offset by improved price realization and cost savings initiatives taken in 2011 and 2012, also negatively impacted operating results. The Company has taken further actions to decrease production to match current market demand during the first quarter of 2013.
Terex Cranes : Net sales for the Cranes segment for the fourth quarter of 2012 decreased $40.4 million, or 9.3%, to $394.9 million versus the fourth quarter of 2011. Net sales were negatively impacted by reduced demand in Western Europe. This was partially offset by strong demand in North America, Australia and the Middle East. Sales in the Middle East more than doubled from the same period last year, particularly in Turkey and Saudi Arabia.
Income from operations in the fourth quarter of 2012 was $45.7 million, or 11.6% of net sales, compared with income from operations of $14.0 million, or 3.2% of net sales, during the fourth quarter of 2011. Operating results benefited from improved price realization, cost reduction actions implemented in the prior year and an increase in aftermarket sales.