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Terex (TEX) Posts Narrower-Than-Expected Loss in Q2

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Terex Corporation (TEX - Free Report) reported loss per share of 5 cents in second-quarter 2020, significantly narrower than the Zacks Consensus Estimate of a loss per share of 56 cents. The company had reported adjusted earnings per share of $1.21 in the prior-year quarter.

Operational Update

Revenues in the quarter declined 47.1% year over year to $691 million. However, the revenue figure beat the Zacks Consensus Estimate of $630 million.

Cost of goods sold plunged 43.7% year over year to $583 million. Gross profit plummeted 60.7% year over year to around $107 million.

Selling, general and administrative expenses dropped 31.7% year on year to $99.7 million in the June-end quarter. Terex reported an operating profit of $7.4 million compared with the year-ago quarter’s $126 million. Operating margin came in at 1.07% compared with the 9.6% witnessed in the year-earlier period.

Terex Corporation Price, Consensus and EPS Surprise

Terex Corporation Price, Consensus and EPS Surprise

Segmental Performance

The Aerial Work Platforms (AWP) segment generated revenues of $414 million in the second quarter, significantly down 52.4% from the year-ago quarter. The segment reported an operating loss of $5 million, as against the operating profit of $86.3 million recorded in the prior-year quarter.

The Material Processing (MP) segment’s revenues totaled $264 million, reflecting a year-over-year decline of 38.7%. The segment reported operating income of $23.4 million, significantly down 64.2% year over year.

Financial Position

Terex had cash and cash equivalents of $426 million as of Jun 30, 2020, compared with $535 million as of Dec 31, 2019. The company generated $12.3 million cash in operating activities in the first half of the current year compared with cash utilization of $48.3 million in the first half of 2019. Long-term debt was $1,167 million as of Jun 30, 2020, compared with $1,169 million as of Dec 31, 2019. At the end of the April-June quarter, Terex had available liquidity of $1 billion.

Additionally, the company undertook significant cost-reduction actions, including suspending dividends and share repurchases, reducing team-member compensation, and making temporary furloughs and permanent layoffs of team members.

Guidance

Terex anticipates sales in the second half of the ongoing year to be similar to the first half of the year, thanks to the current market conditions. Its operating results will be negatively impacted further by the pandemic-related crisis. Terex is focused on aligning its production plans in response to lower customer demand. The company will continue to focus on managing its cost and working capital.

Price Performance

Terex's shares have appreciated 42.9% over the past three months, outperforming the industry’s growth of 23.6%.

Zacks Rank and Stocks to Consider

Terex currently carries a Zacks Rank #3 (Hold).

A few better-ranked stocks in the Industrial Products sector include Silgan Holdings, Inc. (SLGN - Free Report) , IIVI Incorporated (IIVI - Free Report) and Energous Corporation (WATT - Free Report) . While Silgan and IIVI sport a Zacks Rank #1 (Strong Buy), Energous carries a Zacks Rank of 2, at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Silgan has a projected earnings growth rate of 31.5% for the current year. The company’s shares have gained 13.1% in the past three months.

IIVI has an estimated earnings growth rate of 29% for the ongoing year. The company’s shares have rallied 46% in three months’ time.

Energous has an expected earnings growth rate of 44% for 2020. The stock has soared 252.6% over the past three months.

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