Terex Corporation profits fall by 19% in Q1 2016
US equipment group Terex falls hard in port products, but maintains in AWPs and construction segments
Terex has recorded Q1 revenues of $1.4bn – a decrease of 4.7% from the same period a year ago – while its profits of $223.5bn for the quarter represented a significant 19% decline year-on-year.
John Garrison, president and CEO, commented: “Our Q1 results were in-line with our expectations. Our Cranes and material handling and port solutions segment had a challenging quarter, impacted by soft markets.
“Our aerial work platforms (AWPs), materials processing and construction segments executed well and delivered results that were consistent with or better than last year, on an adjusted basis.”
Garrison highlighted caution on the part of its customers given the current global environment, with pockets of opportunity in certain markets, and projected that 2016 net sales will be 10% lower than in 2015.
Interestingly, China’s Zoomlion also reported a Q1 loss of $101.5m, compared with a loss of $59m for the same period in 2015 – casting doubt on its ability to back up its $3.4bn offer to acquire Terex.
With the Q1 report, the company’s shares on the Hong Kong stock exchange fell by as much as 2.5%.
The latest figures follow an earlier report in March that revealed Zoomlion’s annual profit to be the lowest in 15 years, with 2015 as the fourth consecutive year in which its profits had declined.
John Hu, an analyst with Morningstar, said, “I think Zoomlion’s management should reconsider the Terex deal as its Q1 earnings hit a record low. Is it worth spending so much money on Terex?”
This could be good news for Konecranes, which had its own merger deal with Terex put on hold for the talks with Zoomlion.