Terex Corp. (TEX) swung to a first-quarter loss as the weak
economy led to big sales declines across the construction- and
mining-equipment maker's segments.
That weakness has continued into the second quarter, prompting
the company to cut its revenue guidance for the quarter. It now
expects a 40% to 45% drop, worse than the 30% to 35% decline
previously expected.
Shares fell 5.8% to $11.40 in after-hours trading as the latest
quarter's results fell short of analysts' expectations. The stock
has lost more than three-quarters of its value from September and
last month hit its lowest trading level since 2003.
Terex, which has been hurt from a drop in demand amid tighter
credit availability, has cut jobs and inventories since June. But
the size of the demand shift caught the company off guard. However,
the company gained some flexibility to deal with its recessionary
issues when it amended its credit agreement in February.
Terex reported a net loss of $74.9 million, or 79 cents a share,
compared with year-earlier net income of $163.3 million, or $1.59 a
share. The latest quarter included 32 cents in
restructuring-related charges.
Net sales fell 45% to $1.3 billion as declining demand for
aerial work platforms, construction and materials processing
continued. The stronger dollar also weighed down the figure by $194
million.
Analysts polled by Thomson Reuters expected a per-share loss of
11 cents on revenue of $1.53 billion.
Gross margins slumped to 11.1% from 21.8% on the sales woes.
"The turmoil from the global credit crisis and economic slowdown
has quickly and deeply impacted sales for our industry, with
certain sectors down almost 75% from year ago levels," Chairman and
Chief Executive Ron DeFeo said. He added Terex is cutting costs and
operating on a build-to-order basis in response.
Net sales at the biggest segment - aerial work platforms - fell
66%, while construction and cranes posted declines of 48% and 29%,
respectively. Backlog is down 59% from a year ago and 33% from the
fourth quarter at $1.59 billion.
- By John Kell and Jay Miller, Dow Jones Newswires;
201-938-5285; john.kell@dowjones.com