There have been mixed results in the latest round of financial reporting in the US.
John L. Garrison
Terex Corp. has boosted its income from this time last year despite lower sales. The company recently reported second quarter 2016 income from continuing operations of USD109.6 million (USD75.9 million in 2015) on net sales of USD1.3 billion - down from USD1.4 billion in the same quarter last year.
"Our second quarter results reflect a company in transition," says John Garrison, Terex president and CEO. "With the pending sale of our Material Handling & Port Solutions (MHPS) business and parts of our construction portfolio, we made several structural changes in the quarter. MHPS is now accounted for as a discontinued operation.
"Going forward, we will be a more focused company, centred around three segments: aerial work platforms (AWP), cranes, and materials processing."
Garrison says the North American market for many AWP and cranes products is smaller than last year, which is reflected in sales and orders in the quarter. "We grew AWP sales in Europe and parts of Asia, but not enough to offset the softness in North America."
Terex remains focused "on what we can control", he adds. "In the second quarter, we took ... steps to simplify our manufacturing footprint and lower our cost base. After the sale of MHPS, Terex will be a smaller company. We are committed to reducing our cost structure accordingly."
Oshkosh Corporation, the parent company of access-equipment and telehandler manufacturer JLG, has reported third quarter net income of USD84.2 million - down from USD89.9 million in the same period in 2015. (Oshkosh has a different reporting cycle.)
Consolidated net sales rose 8.4% to USD1.75 billion, with higher sales in the defence, fire and emergency, and access equipment segments offsetting a slight decline in sales in the commercial segment.
"Our solid fiscal third quarter results were led by strong performance in our defence and fire & emergency segments, each of which recorded year-over-year increases in sales, operating income and operating income margin," says Wilson Jones, president and chief executive officer of Oshkosh Corporation.
"Our People First culture, the further enhancement and execution of our MOVE strategy and our innovative products contribute to Oshkosh being a different integrated global industrial, enabling us to deliver solid performance in a variety of economic conditions."
Jones added, "The fiscal third quarter was highlighted by progress on many fronts, most notably in our defense segment as we prepare to ramp up production and deliver our revolutionary new Joint Light Tactical Vehicle (JLTV). Our activities in fiscal 2016 are preparing us to successfully deliver low-rate initial production JLTVs to our US government customer, starting late this fiscal year. "
"Our access equipment segment continues to manage production levels while delivering high-quality aerial products in a market that we expect to be down compared with fiscal 2015. The team made great progress this quarter lowering inventory as we work to optimise our working capital."
Looking forward, the company increased its projecting net sales of USD6 billion to USD6.1 billion and operating income of USD340 million to USD360 million. The increased estimate range largely reflects higher defence and fire & emergency segment sales and operating income, partially offset by lower access equipment segment operating income, higher corporate costs related to increased incentive compensation expenses and a higher effective income tax rate.