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Terex Corporation (TEX - Free Report) reported first-quarter 2021 adjusted earnings per share of 56 cents, which beat the Zacks Consensus Estimate of 22 cents. This also marked a turnaround from a loss of 35 cents per share in the prior-year quarter. The improved performance can be attributed to rising demand, margin expansion at its segments and its cost reduction efforts.
Operational Update
Revenues in the reported quarter rose 4% year over year to $864 million and surpassed the Zacks Consensus Estimate of $821 million. The company witnessed a whopping improvement of 101% in bookings and growth of 104% in backlog, both on a year-over-year basis.
Cost of goods sold fell 1.2% year over year to $689 million. Gross profit increased 28% year over year to $175 million.
Terex Corporation Price, Consensus and EPS Surprise
Selling, general and administrative expenses (SG&A) was $114 million in the quarter under review, down 21% from $144 million in the prior-year quarter, reflecting the company’s aggressive management of SG&A expenses. Terex reported an operating profit of $61.5 million against an operating loss of $7.1 million in the last-year quarter.
Segmental Performance
The Aerial Work Platforms segment generated revenues of $477 million in the first quarter, down 7% from the year-ago quarter. The segment reported an operating profit of $27 million against the prior-year quarter’s loss of $6 million.
The Material Processing segment’s revenues totaled $378 million, reflecting year-over-year growth of 20%. The segment reported an operating income of $49 million, up 96% year over year.
Financial Position
Terex had cash and cash equivalents of $572.9 million as of Mar 31, 2021, compared with $665 million as of Dec 31, 2020. The company generated $138 million of cash from operating activities in the reported quarter compared with an usage of $88.7 million in the prior-year quarter. Long-term debt was $973.5 million as of Mar 31, 2021, compared with $1,166 million as of Dec 31, 2020. During the quarter, Terex refinanced a large portion of its capital structure, including its revolving credit facility and $600 million of bonds.
Guidance
Due to improved market conditions and operational execution, Terex now anticipates earnings per share for 2021 in the range of $2.35 to $2.55, higher than the previous expectation in the band of $1.95 to $2.35. The guidance suggests a substantial improvement from earnings of 13 cents reported in 2020. It includes a charge of 30 cents associated with capital structure refinancing.
The company expects sales to be around $3.7 billion in 2021, up from its previous expectation of $3.45 billion in 2021. The updated sales growth guidance indicates year-over-year growth of 20%.
Price Performance
Terex's shares have soared 244% over the past year, compared with the industry’s rally of 114.6%.
Dover has a projected earnings growth rate of 21.8% for 2021. Over the past year, the company’s shares have gained 65%.
Caterpillar has an estimated earnings growth rate of 25.7% for the ongoing year. The company’s shares have rallied 112% in the past year.
Pentair has an expected earnings growth rate of 11.6% for 2021. The stock has surged 87% in a year’s time.
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Terex (TEX) Q1 Earnings & Revenues Beat Estimates, Ups '21 View
Terex Corporation (TEX - Free Report) reported first-quarter 2021 adjusted earnings per share of 56 cents, which beat the Zacks Consensus Estimate of 22 cents. This also marked a turnaround from a loss of 35 cents per share in the prior-year quarter. The improved performance can be attributed to rising demand, margin expansion at its segments and its cost reduction efforts.
Operational Update
Revenues in the reported quarter rose 4% year over year to $864 million and surpassed the Zacks Consensus Estimate of $821 million. The company witnessed a whopping improvement of 101% in bookings and growth of 104% in backlog, both on a year-over-year basis.
Cost of goods sold fell 1.2% year over year to $689 million. Gross profit increased 28% year over year to $175 million.
Terex Corporation Price, Consensus and EPS Surprise
Terex Corporation price-consensus-eps-surprise-chart | Terex Corporation Quote
Selling, general and administrative expenses (SG&A) was $114 million in the quarter under review, down 21% from $144 million in the prior-year quarter, reflecting the company’s aggressive management of SG&A expenses. Terex reported an operating profit of $61.5 million against an operating loss of $7.1 million in the last-year quarter.
Segmental Performance
The Aerial Work Platforms segment generated revenues of $477 million in the first quarter, down 7% from the year-ago quarter. The segment reported an operating profit of $27 million against the prior-year quarter’s loss of $6 million.
The Material Processing segment’s revenues totaled $378 million, reflecting year-over-year growth of 20%. The segment reported an operating income of $49 million, up 96% year over year.
Financial Position
Terex had cash and cash equivalents of $572.9 million as of Mar 31, 2021, compared with $665 million as of Dec 31, 2020. The company generated $138 million of cash from operating activities in the reported quarter compared with an usage of $88.7 million in the prior-year quarter. Long-term debt was $973.5 million as of Mar 31, 2021, compared with $1,166 million as of Dec 31, 2020. During the quarter, Terex refinanced a large portion of its capital structure, including its revolving credit facility and $600 million of bonds.
Guidance
Due to improved market conditions and operational execution, Terex now anticipates earnings per share for 2021 in the range of $2.35 to $2.55, higher than the previous expectation in the band of $1.95 to $2.35. The guidance suggests a substantial improvement from earnings of 13 cents reported in 2020. It includes a charge of 30 cents associated with capital structure refinancing.
The company expects sales to be around $3.7 billion in 2021, up from its previous expectation of $3.45 billion in 2021. The updated sales growth guidance indicates year-over-year growth of 20%.
Price Performance
Terex's shares have soared 244% over the past year, compared with the industry’s rally of 114.6%.
Zacks Rank and Stocks to Consider
Terex currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Industrial Products sector include Dover Corporation (DOV - Free Report) , Caterpillar Inc. (CAT - Free Report) and Pentair plc (PNR - Free Report) , each carrying a Zacks Rank of 2 (Buy), at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Dover has a projected earnings growth rate of 21.8% for 2021. Over the past year, the company’s shares have gained 65%.
Caterpillar has an estimated earnings growth rate of 25.7% for the ongoing year. The company’s shares have rallied 112% in the past year.
Pentair has an expected earnings growth rate of 11.6% for 2021. The stock has surged 87% in a year’s time.
Breakout Biotech Stocks with Triple-Digit Profit Potential
The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.
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