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Terex (TEX) Q4 Earnings In Line With Estimates, Rise Y/Y
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Terex Corporation (TEX - Free Report) reported fourth-quarter 2023 adjusted earnings per share of $1.41, which marks a year-over-year improvement of 5.2%, aided by improving demand and a favorable price realization. The bottom line was on par with the Zacks Consensus Estimate.
Including one-time items, earnings per share from continuing operations in the quarter under review were $1.88 compared with $1.34 in the fourth quarter of 2022.
Operational Update
Revenues in the reported quarter increased 0.4% year over year to $1.22 billion. The figure, however, missed the Zacks Consensus Estimate by 0.05%. The year-over-year upside was driven by healthy demand across multiple businesses.
The company reported a backlog of $3.4 billion at the end of 2023, down from $4.1 billion as of 2022-end. The figure also lagged our projection of $3.56 billion.
Terex Corporation Price, Consensus and EPS Surprise
The cost of goods sold decreased 2.3% year over year to $960 million. Gross profit rose 11.5% year over year to $262.5 million. Selling, general and administrative expenses amounted to $147 million in the quarter under review, up 28% from the year-ago quarter's level.
Terex reported an operating profit of $116 million, down 4.2% from $120.8 million reported in the year-ago quarter. The operating margin in the quarter under review was 9.5%, down from 9.9% reported in the year-ago quarter.
Segment Performances
The Aerial Work Platforms segment generated revenues of $660 million, down 1.8% from the year-ago quarter's figure due to seasonal patterns.
The segment reported an operating profit of $61 million, reflecting 13% growth from the year-ago quarter’s $54 million. Price realization, favorable mix and gains from cost reduction initiatives, partially offset by costs associated with the ramp-up of the Monterrey facility and severance charges, drove the improvement. We had expected revenues of $663 million and an operating income of $79 million.
The Material Processing segment’s revenues were around $555 million, indicating year-over-year growth of 0.8%. Strong demand for the company’s products across multiple businesses drove the improvement. The segment’s revenues were higher than our estimate of $553 million.
The segment reported an operating income of $83.8 million, down 3.7% year over year. The figure missed our estimate of $91 million. Gains from manufacturing efficiencies and disciplined cost management were offset by non-recurring charges related to an unfavorable product liability verdict.
Cash Flow & Balance Sheet
Terex had cash and cash equivalents of $371 million as of Dec 31, 2023, compared with $304 million as of Dec 31, 2022. The company generated $459 million in cash from operating activities in 2023, marking an improvement from the $261 million reported in 2022.
The company returned $104 million to shareholders through share repurchases and dividends through the course of 2023. TEX has raised its dividend twice in the year, and the current quarterly dividend payout is 17 cents per share.
2023 Performance
Terex’s adjusted earnings per share surged 63% year over year to $7.06 in 2023, driven by incremental profit achieved on higher sales volume, improved manufacturing efficiencies and price realization, partially offset by higher costs. The bottom line missed the Zacks Consensus Estimate of earnings of $7.10 per share. The company’s guidance for the year was $7.05 per share.
Including one-time items, earnings per share from continuing operations were $7.56 in 2023 compared with $4.32 in 2022.
Revenues increased 17% year over year to $5.15 billion in 2023, driven by healthy demand across multiple businesses and regions as well as favorable price realization. Revenues were in line with the Zacks Consensus Estimate.
2024 Outlook
Terex expects earnings per share between $6.85 billion and $7.25 billion in 2024. The company anticipates sales in the range of $5.1-$5.3 billion. Free cash flow is expected to range between $325 million and $375 million.
The Materials Processing segment’s revenues are expected to be in the band of $2.2-$2.3 billion. Operating margins are anticipated to be between 15.6% and 15.9%.
The Aerial Work Platforms segment’s revenues are expected between $2.9 billion and $3 billion. The segment is expected to report operating margins in the range of 13.4-13.7%.
Price Performance
Terex's shares have risen 25% over the past year compared with the industry’s 30.1% growth.
The Zacks Consensus Estimate for Cadre Holdings’ 2024 earnings is pegged at $1.11 per share. The consensus estimate for 2024 earnings has moved 1% north in the past 60 days and suggests year-over-year growth of 16.7%. The company has a trailing four-quarter average earnings surprise of 33%. CDRE shares have risen 50% in the past year.
The Zacks Consensus Estimate for AZZ’s fiscal 2024 earnings per share is pegged at $4.19. The consensus estimate for 2024 earnings has moved 2% north in the past 60 days. The company has a trailing four-quarter average earnings surprise of 37.6%. AZZ shares have rallied 70% in the past year.
Applied Industrial has a trailing four-quarter average earnings surprise of 13.9%. The Zacks Consensus Estimate for AIT’s 2024 earnings is pinned at $9.43 per share, which indicates year-over-year growth of 7.8%. The bottom-line estimate has remained unchanged in the past 60 days. The company’s shares have risen 29.5% in a year.
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Terex (TEX) Q4 Earnings In Line With Estimates, Rise Y/Y
Terex Corporation (TEX - Free Report) reported fourth-quarter 2023 adjusted earnings per share of $1.41, which marks a year-over-year improvement of 5.2%, aided by improving demand and a favorable price realization. The bottom line was on par with the Zacks Consensus Estimate.
Including one-time items, earnings per share from continuing operations in the quarter under review were $1.88 compared with $1.34 in the fourth quarter of 2022.
Operational Update
Revenues in the reported quarter increased 0.4% year over year to $1.22 billion. The figure, however, missed the Zacks Consensus Estimate by 0.05%. The year-over-year upside was driven by healthy demand across multiple businesses.
The company reported a backlog of $3.4 billion at the end of 2023, down from $4.1 billion as of 2022-end. The figure also lagged our projection of $3.56 billion.
Terex Corporation Price, Consensus and EPS Surprise
Terex Corporation price-consensus-eps-surprise-chart | Terex Corporation Quote
The cost of goods sold decreased 2.3% year over year to $960 million. Gross profit rose 11.5% year over year to $262.5 million. Selling, general and administrative expenses amounted to $147 million in the quarter under review, up 28% from the year-ago quarter's level.
Terex reported an operating profit of $116 million, down 4.2% from $120.8 million reported in the year-ago quarter. The operating margin in the quarter under review was 9.5%, down from 9.9% reported in the year-ago quarter.
Segment Performances
The Aerial Work Platforms segment generated revenues of $660 million, down 1.8% from the year-ago quarter's figure due to seasonal patterns.
The segment reported an operating profit of $61 million, reflecting 13% growth from the year-ago quarter’s $54 million. Price realization, favorable mix and gains from cost reduction initiatives, partially offset by costs associated with the ramp-up of the Monterrey facility and severance charges, drove the improvement. We had expected revenues of $663 million and an operating income of $79 million.
The Material Processing segment’s revenues were around $555 million, indicating year-over-year growth of 0.8%. Strong demand for the company’s products across multiple businesses drove the improvement. The segment’s revenues were higher than our estimate of $553 million.
The segment reported an operating income of $83.8 million, down 3.7% year over year. The figure missed our estimate of $91 million. Gains from manufacturing efficiencies and disciplined cost management were offset by non-recurring charges related to an unfavorable product liability verdict.
Cash Flow & Balance Sheet
Terex had cash and cash equivalents of $371 million as of Dec 31, 2023, compared with $304 million as of Dec 31, 2022. The company generated $459 million in cash from operating activities in 2023, marking an improvement from the $261 million reported in 2022.
The company returned $104 million to shareholders through share repurchases and dividends through the course of 2023. TEX has raised its dividend twice in the year, and the current quarterly dividend payout is 17 cents per share.
2023 Performance
Terex’s adjusted earnings per share surged 63% year over year to $7.06 in 2023, driven by incremental profit achieved on higher sales volume, improved manufacturing efficiencies and price realization, partially offset by higher costs. The bottom line missed the Zacks Consensus Estimate of earnings of $7.10 per share. The company’s guidance for the year was $7.05 per share.
Including one-time items, earnings per share from continuing operations were $7.56 in 2023 compared with $4.32 in 2022.
Revenues increased 17% year over year to $5.15 billion in 2023, driven by healthy demand across multiple businesses and regions as well as favorable price realization. Revenues were in line with the Zacks Consensus Estimate.
2024 Outlook
Terex expects earnings per share between $6.85 billion and $7.25 billion in 2024. The company anticipates sales in the range of $5.1-$5.3 billion. Free cash flow is expected to range between $325 million and $375 million.
The Materials Processing segment’s revenues are expected to be in the band of $2.2-$2.3 billion. Operating margins are anticipated to be between 15.6% and 15.9%.
The Aerial Work Platforms segment’s revenues are expected between $2.9 billion and $3 billion. The segment is expected to report operating margins in the range of 13.4-13.7%.
Price Performance
Terex's shares have risen 25% over the past year compared with the industry’s 30.1% growth.
Image Source: Zacks Investment Research
Zacks Rank and Stocks to Consider
Terex currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the Industrial Products sector are Cadre Holdings, Inc. (CDRE - Free Report) , AZZ Inc. (AZZ - Free Report) and Applied Industrial Technologies (AIT - Free Report) . CDRE currently sports a Zacks Rank #1 (Strong Buy), while AZZ and AIT carry a Zacks Rank #2 (Buy) each. You can see the complete list of today's Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Cadre Holdings’ 2024 earnings is pegged at $1.11 per share. The consensus estimate for 2024 earnings has moved 1% north in the past 60 days and suggests year-over-year growth of 16.7%. The company has a trailing four-quarter average earnings surprise of 33%. CDRE shares have risen 50% in the past year.
The Zacks Consensus Estimate for AZZ’s fiscal 2024 earnings per share is pegged at $4.19. The consensus estimate for 2024 earnings has moved 2% north in the past 60 days. The company has a trailing four-quarter average earnings surprise of 37.6%. AZZ shares have rallied 70% in the past year.
Applied Industrial has a trailing four-quarter average earnings surprise of 13.9%. The Zacks Consensus Estimate for AIT’s 2024 earnings is pinned at $9.43 per share, which indicates year-over-year growth of 7.8%. The bottom-line estimate has remained unchanged in the past 60 days. The company’s shares have risen 29.5% in a year.