News story

Sales grow for Terex, Oshkosh segments

Wednesday, 30 July 2014 ( #678 ) - United States
Terex's Genie AWP-30S Super Series aerial work platform
Terex's Genie AWP-30S Super Series aerial work platform
In quarterly security filings, Terex Corp reports 18% growth for its aerial work platform (AWP) segment and Oshkosh Corp says its access equipment segment sales increased 10.4%.

Terex

Terex's AWP business segment, primarily under the Genie brand, reports sales of USD717.9 million for the second quarter ended 30 June versus USD606.6 million for the corresponding period last year.

"AWP is expected to continue to perform well, both in terms of sales and margin opportunities," says Ronald M DeFeo, Terex executive chairman and chief executive officer.

"For AWP, the second quarter performance was led by North America, where net sales rose more than 25% versus the prior-year period," DeFeo reports. "Europe (AWP) grew more than 15%. However, on a year-to-date basis, European growth is actually outpacing North American growth, reflecting the improving trend in Europe. But still, of course, Europe is way below the past prior peak."

AWP sales in Latin America, however, declined more than 30% in the quarter. "We expect continued strength, particularly in North America and Europe," DeFeo notes.

As of 30 June, the AWP segment had a backlog of firm orders with a value of USD418.4 million, down 20% from USD522.9 million as of 31 March and down 15.9% from USD497.3 million as of 30 June 2013.

Matthew Fearon, president of the AWP segment, says the unit's gross profit line at 22.9% was down 1.3% with three main contributing factors.

"The first one is the mix, and it's basically driven by a client shift to the telehandlers product line, where we have typically not had a full product line and we have not had significant share," he notes. "It's also the fastest growth category."

For the first half of the year, Terex sales of telehandlers increased more than 50%. "If you look at the other categories where we typically get our revenue, the second highest category is scissors, and then booms would be the smallest," he says.

Manufacturing productivity is the second reason for the AWP segment's incremental margin deterioration. "A lot of it has to do with the manufacturing start-up of telehandler production in Oklahoma City," Fearon says. "That's a planned investment in capacity. It's going to be a multi-year endeavour. The first units shipped in June."

Higher steel prices also impacted the AWP gross profit line. "If you look at our North American plate cost in 2013, we were getting benefits from the way we were buying steel," Fearon reports. "In late 2013, steel plate prices went up, and we're seeing the effect of that. We do expect to see some improvement over time."

For all operations, Westport-based Terex reports profit of USD139.8 million on sales of USD2.055 billion for the three months ended 30 June. Those results compare with profit of USD21.3 million on sales of USD1.861 billion for the corresponding year-earlier quarter. In addition to aerial work platforms, Terex business segments involve construction, cranes, materials handling-port solutions and materials processing.


Oshkosh

Sales for the Oshkosh access equipment segment increased to USD1.04 billion for the third quarter ended 30 June from USD941.5 million for the comparable year-earlier quarter. The amount is a record for quarterly sales for the segment, which principally involves the JLG line of materials handling equipment.

The improvement resulted largely from higher unit volumes in North America and Europe and higher pricing. Those results were offset in part by the absence of US military telehandler sales under a contract that was completed in the fiscal 2013 fourth quarter ended 30 September. Sales of access equipment, excluding US military telehandler sales in fiscal 2013, rose 13.2% in the third quarter.

"We are pleased with our overall third quarter results, led by record performance in the access equipment segment and breakthrough improvement in the commercial segment," says Charles L Szews, Oshkosh chief executive officer.

Within the access equipment segment, quarterly sales of aerial work platforms increased to USD558.1 million from USD485.4 million and sales of telehandlers grew to USD324.4 million from USD317.3 million. Other work climbed to USD156.7 million from USD138.8 million.

The period-end backlog for access equipment was USD487.4 million versus $621.4 million on 30 June 2013. Oshkosh says the lower backlog was largely due to timing of orders from large US national rental companies and the completion of US Department of Defence military telehandler production in the fourth quarter of fiscal 2013. Backlog for these telehandlers was USD17.4 million at 30 June 2013.

For all of its third quarter operations through 30 June, the Oshkosh-based corporation reports profit of USD105.1 million on sales of USD1.932 billion versus profit of USD148.4 million on sales of USD2.204 billion for the comparable year-earlier period. Improved demand in the company's access equipment and commercial segments partially offset expected lower defence segment sales.

"We continue to manage the downturn in our defense business in a responsible manner," Szews reports. "We recently completed the previously announced additional reduction in our defence segment workforce, while retaining the expertise and skill sets that are essential to support potential new business, including the US Joint Light Tactical Vehicle program and several international tactical wheeled vehicle opportunities."
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