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Terex To Divest India-based Compact Construction Business
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Terex Corporation (TEX - Free Report) has agreed to sell its India-based compact construction business, Terex Equipment Private Limited to Manitou. This marks an important step in execution of Terex’s strategy to focus its portfolio on those products which have significant presence in the market and has the potential to provide greatest returns for shareholders.
Terex Equipment Private Limited manufactures and sells backhoe loaders, engages in the sale of wheel loaders and contract manufactures along with selling skid steer loaders. The sale, pursuant to customary closing conditions, is expected to be finalized in the first half of 2017.
This sale marks the disposition of the last significant asset held for sale in Terex’s former Construction segment. Earlier in 2016, the company completed the sale of its German compact construction business to Yanmar for $60 million in cash. Included in the sale was the manufacturing facility located in Crailsheim, Germany, and parts distribution center located in Rothenberg, Germany.
Terex is simplifying organizational structure and continues to make progress on refocusing portfolio. These transactions will help the company to focus on its product portfolio. The company has also completed the Material Handling & Port Solutions (MHPS) sale to Konecranes in Jan 2017. Through these actions, Terex will be able to focus on businesses that can consistently deliver returns in excess of cost of capital. It will also provide greater financial flexibility to the company and strengthen its balance sheet. Further, Terex has designated its Brazilian Utilities as “held for sale”. The company is now nearing completion of the Focus phase of its strategy deployment.
However, Terex’s results continue to bear the brunt of weak mining market along with lower oil and gas prices. In the past one year, Terex gained 20.5%, underperforming the Zacks categorized Manufacturing - Construction and Mining sub industry’s rise of 28.6%.
The Crane segment is expected to suffer an 11% drop in sales in 2017. In North America, oil prices are still at low levels to stimulate new demand and there's a significant inventory of low-hour used cranes available to compete with new crane sales. Customers are looking to see consistent improvement in utilization and rental rates before they order new machines. Lower fleet replacement from North American AWP rental customers will affect its Aerial Work Platforms segment.
Terex currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks worth considering in the broader sector include ACCO Brands Corporation (ACCO - Free Report) , Parker-Hannifin Corporation (PH - Free Report) and Brady Corporation (BRC - Free Report) . ACCO Brands has an average positive earnings surprise of 24.74% in the past four quarters and sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Parker-Hannifin Corporation has delivered an average positive earnings surprise of 12.44% in the past four quarters and also carries a Zacks Rank #1. Brady Corporation, a Zacks Rank #2 (Buy) stock has an average positive earnings surprise of 20.84% in the same time frame.
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Terex To Divest India-based Compact Construction Business
Terex Corporation (TEX - Free Report) has agreed to sell its India-based compact construction business, Terex Equipment Private Limited to Manitou. This marks an important step in execution of Terex’s strategy to focus its portfolio on those products which have significant presence in the market and has the potential to provide greatest returns for shareholders.
Terex Equipment Private Limited manufactures and sells backhoe loaders, engages in the sale of wheel loaders and contract manufactures along with selling skid steer loaders. The sale, pursuant to customary closing conditions, is expected to be finalized in the first half of 2017.
Terex Corporation Price
Terex Corporation Price | Terex Corporation Quote
This sale marks the disposition of the last significant asset held for sale in Terex’s former Construction segment. Earlier in 2016, the company completed the sale of its German compact construction business to Yanmar for $60 million in cash. Included in the sale was the manufacturing facility located in Crailsheim, Germany, and parts distribution center located in Rothenberg, Germany.
Terex is simplifying organizational structure and continues to make progress on refocusing portfolio. These transactions will help the company to focus on its product portfolio. The company has also completed the Material Handling & Port Solutions (MHPS) sale to Konecranes in Jan 2017. Through these actions, Terex will be able to focus on businesses that can consistently deliver returns in excess of cost of capital. It will also provide greater financial flexibility to the company and strengthen its balance sheet. Further, Terex has designated its Brazilian Utilities as “held for sale”. The company is now nearing completion of the Focus phase of its strategy deployment.
However, Terex’s results continue to bear the brunt of weak mining market along with lower oil and gas prices. In the past one year, Terex gained 20.5%, underperforming the Zacks categorized Manufacturing - Construction and Mining sub industry’s rise of 28.6%.
The Crane segment is expected to suffer an 11% drop in sales in 2017. In North America, oil prices are still at low levels to stimulate new demand and there's a significant inventory of low-hour used cranes available to compete with new crane sales. Customers are looking to see consistent improvement in utilization and rental rates before they order new machines. Lower fleet replacement from North American AWP rental customers will affect its Aerial Work Platforms segment.
Terex currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks worth considering in the broader sector include ACCO Brands Corporation (ACCO - Free Report) , Parker-Hannifin Corporation (PH - Free Report) and Brady Corporation (BRC - Free Report) . ACCO Brands has an average positive earnings surprise of 24.74% in the past four quarters and sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Parker-Hannifin Corporation has delivered an average positive earnings surprise of 12.44% in the past four quarters and also carries a Zacks Rank #1. Brady Corporation, a Zacks Rank #2 (Buy) stock has an average positive earnings surprise of 20.84% in the same time frame.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020. Click here for the 6 trades >>