Shares of Terex Corporation TEX have lost 4% since it reported third-quarter 2024 results on Oct. 30, 2024, despite an earnings beat. Investors seem to be worried about the year-over-year declines in its top and bottom lines, reflecting lower end-market demand in Europe. TEX reported adjusted earnings per share of $1.46, which beat the Zacks Consensus Estimate of $1.27. The bottom line fell 17% from the prior-year quarter.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
Terex’s Revenues & Profits Dip in Q3
Revenues in the quarter fell 6% year over year to $1.2 billion, which surpassed the Zacks Consensus Estimate of $1.14 billion. The company witnessed lower-than-expected volumes.
Terex Corporation Price, Consensus and EPS Surprise
Terex Corporation Price, Consensus and EPS Surprise
The cost of goods sold decreased 3% year over year to $967 million. Gross profit fell 16% to $245 million. Selling, general and administrative expenses were $123 million , down 5% from the prior-year quarter.
Terex reported an operating profit of $122 million, which marked a 25% plunge from the prior-year quarter. The downside was mainly due to decline in sales volume and unfavorable mix. The operating margin was 10.1% compared with the 12.7% in the last-year quarter.
Adjusted operating profit was $127 million, while the adjusted operating margin was 10.5%.
TEX’s Segment Performances
The Material Processing segment’s revenues totaled $444 million, reflecting a year-over-year fall of 18% due to channel adjustments and weak end-market demand in few areas. The segment’s revenues lagged our estimate of $452 million.
The segment reported an operating income of $83 million, down 11% year over year. The figure beat our estimate of $49 million. The downside was attributed to lower sales volume and an unfavorable product and geographical mix.
The Aerial Work Platforms segment generated revenues of $769 million , up 2.4% from the year-ago quarter. We expected the segment’s sales to be $731 million .
The segment reported an operating profit of $83 million, down 11% year over year due to unfavorable product mix and higher freight costs. Our estimate for the segment’s operating profit was $78 million.
Terex’s Cash Flow & Balance Sheet Updates
Terex had cash and cash equivalents of $352 million as of Sept. 30, 2024, compared with $371 million as of Dec. 31, 2023. The company generated $149 million in cash from operating activities in the first nine months of 2024 compared with $369 million in the prior-year period. It returned $66 million to shareholders through share repurchases and dividends in the January-September period.
TEX Acquires ESG
In October 2024, Terex completed the previously announced acquisition of Environmental Solutions Group (“ESG”). This added a market leader in waste and recycling to its portfolio. It will also enhance Terex’s financial profile, including revenues, free cash flow, EBITDA margin and earnings per share.
Terex Revises 2024 Outlook
Including the contribution from ESG, Terex expects sales to be between $5 billion and $5.2 billion in 2024. The midpoint of the guidance implies a year-over-year decline of 1%. Revenues for the Materials Processing and AWP segments are projected around $1.9 billion and $3 billion, respectively.
EBITDA is expected to be between $635 million and $670 million. Operating margin is expected to be in the band of 11.4- 11.7%.
Terex expects adjusted earnings per share to be between $5.85 and $6.25. The guidance indicates a 14% decline from adjusted earnings of $7.06 per share reported in 2023.
TEX Stock’s Price Performance
Terex's shares have gained 8.4% over the past year compared with the industry’s 55.8% growth.
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Terex’s Zacks Rank
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.
Performances of Other Manufacturing Stocks
Caterpillar Inc. CAT reported third-quarter 2024 adjusted earnings per share of $5.17, which missed the Zacks Consensus Estimate of $5.33 by a margin of 3%. The bottom-line figure was 6% lower than the year-ago quarter.
Caterpillar reported revenues of around $16.1 billion, which missed the Zacks Consensus Estimate of $16.35 billion by a margin of 1.5%. The top line declined 4% year over year as favorable price realization was offset by an overall decline in volumes.
H&E Equipment HEES reported earnings per share of 85 cents, which missed the Zacks Consensus Estimate of 97 cents. The bottom line marked a 42% decline from the year-ago quarter.
Revenues dipped 4% year over year to $385 million, which missed the consensus estimate of $392 million. Rental revenues rose 2.8% from the year-ago quarter, primarily due to the ongoing expansion of HEES’ branch network.
The Manitowoc Company, Inc. MTW reported an adjusted loss of 8 cents per share in the third-quarter 2024, missing the Zacks Consensus Estimate of earnings of 10 cents per share. The company reported earnings per share of 22 cents in the year-ago quarter.
Manitowoc’s revenues were up 1% year over year to $525 million . The top line beat the Zacks Consensus Estimate of $521 million. Orders were down 20% year over year to $424.7 million.
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