Terex Corporation TEX reported adjusted earnings per share of 77 cents, which beat the Zacks Consensus Estimate of 76 cents. The bottom line plunged 45% from the prior-year quarter due to lower volumes.
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Including one-time items, the company reported a loss of three cents per share against earnings of $1.88 per share in the year-ago quarter.
Terex Corporation Price, Consensus and EPS Surprise
Revenues rose 1.5% year over year to $1.24 billion, which surpassed the Zacks Consensus Estimate of $1.23 billion. In October 2024, Terex completed the acquisition of Environmental Solutions Group (“ESG”), adding a market leader in waste and recycling to its portfolio. It will also enhance the company's financial profile, including revenues, free cash flow, EBITDA margin and earnings per share.
In the fourth quarter, the contribution from ESG was offset by declines in the Materials Processing and Aerial Work Platforms segments due to lower volumes.
TEX Sees Margin Contraction in Q4
The cost of goods sold increased 8.7% year over year to $1.04 billion. Gross profit fell 11.5% to $236 million. Selling, general and administrative expenses were $139 million, up 4% from the prior-year quarter.
Terex reported an operating profit of $53 million, which marked a 54% plunge from the prior-year quarter. The operating margin was 4.3% compared with 9.5% in the last year quarter.
Adjusted operating profit was $97 million compared with $132.7 million in the year-ago quarter. Adjusted operating margin was 7.8%, a 310-basis point contraction from the year-ago quarter.
The drop in profits was attributed to decline in sales volume, lower production resulting in unfavorable manufacturing variances and unfavorable mix in the legacy businesses. These were somewhat offset by cost reductions, lower incentive compensation and ESG accretion.
TEX’s Segment Performances in Q4
The Material Processing segment’s revenues totaled $439 million, reflecting a year-over-year fall of 21% due to channel adjustments and weak end-market demand in few areas. The segment’s revenues beat our estimate of $438 million.
The segment reported an operating income of $47 million, down 44% year over year. The figure missed our estimate of $64 million. The downside was attributed to lower sales volume and an unfavorable product and geographical mix, partially offset by cost reduction actions. Adjusted operating profit for the segment was $48 million.
The Aerial Work Platforms segment generated revenues of $573 million, down 13.2% from the year-ago quarter as customers adjusted delivery schedules to align with fleet productivity and shorter equipment lead times. We expected the segment’s sales to be $583 million.
The segment reported an operating profit of $18 million, which marked a 70.5% plunge year over year. Profits were impacted by aggressive production cuts and an unfavorable mix in Aerials. Our estimate for the segment’s operating profit was $28 million. Adjusted operating profit was $19 million.
The ESG segment reported revenues of $228 million and an operating profit of $12 million. We estimated revenues of $200 million and an operating profit of $37 million.
Terex’s Cash Flow & Balance Sheet Updates
Terex had cash and cash equivalents of $388 million as of Dec. 31, 2024, compared with $371 million as of Dec. 31, 2023. The company generated $326 million in cash from operating activities in 2024 compared with $459 million in the prior-year period. It returned $92 million to shareholders through 2024 in the form of share repurchases and dividends.
TEX’s 2024 Performance
Terex’s adjusted earnings per share declined 13.5% year over year to $6.11 in 2024. The bottom line beat the Zacks Consensus Estimate of earnings of $6.09 per share. The company’s guidance for the year was $5.85-$6.25 per share.
The year-over-year decline was due to lower sales volume, unfavorable manufacturing variances and mix in the legacy businesses, partially offset by cost reductions, lower incentive compensation and accretion from ESG in the fourth quarter. Including one-time items, earnings per share from continuing operations were $4.96 in 2024 compared with $7.56 in 2023.
Revenues dipped 0.5% year over year to $5.13 billion in 2024. The decline reflected industry-wide channel adjustments in the Material Processing segment, offset by modest growth in Aerial Work Platforms and the fourth-quarter addition of ESG. Revenues beat the Zacks Consensus Estimate of $5.12 billion.
Terex Provides 2025 Outlook
Terex expects sales for the Materials Processing segment to be down high single digits compared with the prior-year baseline of $1.9 billion.
The AWP segment’s revenues are expected to decline in low double digits from the prior-year baseline of $2.41 billion.
Net sales are projected to be in the range of $5.3-$5.5 billion. The midpoint of the guidance implies year-over-year growth of 6%.
EBITDA is expected to be around $660 million. Terex expects adjusted earnings per share to be between $4.70 and $5.10. The guidance indicates a year-over-year drop of 20% at the midpoint.
TEX Stock’s Price Performance & Zacks Rank
Terex's shares have lost 12.8% over the past year against the industry’s 10.3% growth.
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TEX currently carries a Zacks Rank #5 (Strong Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Terex’s Peer
Caterpillar Inc. CAT reported adjusted earnings per share of $5.14 for the fourth quarter of 2024, which beat the Zacks Consensus Estimate of $4.97 by a margin of 3%. However, the bottom-line figure was down 2% year over year due to volume declines across its segments. The drop in sales volume was due to the impact of changes in dealer inventories and lower sales of CAT equipment to end users.
Fourth-quarter revenues were around $16.2 billion, which missed the Zacks Consensus Estimate of $16.64 billion by a margin of 2.6%. The top line declined 5% year over year due to an overall decline in volumes in its segments and unfavorable price realization.
Other Manufacturing Stocks Awaiting Results
Hyster-Yale, Inc. HY, expected to release fourth-quarter 2024 results later this month, has a trailing four-quarter average earnings surprise of 10.3%. The Zacks Consensus Estimate for HY’s earnings is pegged at $1.38 per share, implying a year-over-year decline of 3.5%.
The consensus estimate for the company’s top line is pegged at $1.02 billion, indicating a 0.5% dip from the prior-year figure.
The Manitowoc Company MTW is expected to release its fourth-quarter 2024 results on Feb. 12. The Zacks Consensus Estimate for MTW’s earnings is pegged at 14 cents per share, indicating year-over-year growth of 56%.
The consensus estimate for Manitowoc’s top line is pegged at $592.7 million, indicating a 0.5% dip from the prior year’s actual. MTW has a trailing four-quarter average earnings surprise of negative 79%
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