Terex Corporation (TEX Quick QuoteTEX - Free Report) shares have gained 15.7% since its third-quarter 2026 earnings release on Oct. 28, supported by better-than-expected earnings and revenues, robust order growth and encouraging full-year guidance. TEX reported adjusted earnings of $1.50 per share, beating the Zacks Consensus Estimate of $1.42 by 5.6%. Earnings were flat year over year.

Revenues surged 58.4% year over year to $2.20 billion, surpassing the consensus estimate of $2.17 billion by 1.4%. Pro forma revenues grew 11.6%, driven by higher shipments across Materials Processing, Specialty Vehicles and Aerials.

TEX Benefits From Robust Bookings and Backlog Growth

Terex reported bookings of $2.3 billion, reflecting a 52.7% year-over-year increase on a pro forma basis. The book-to-bill ratio was 103%, indicating that incoming orders exceeded quarterly sales.

Backlog rose 12.9% year over year  to $7 billion on a pro forma basis. All four operating segments recorded increased bookings, providing improved revenue visibility. Management highlighted solid order activity and progress in integrating the expanded business.

Terex Reports Higher Profit Despite Margin Pressure

The cost of goods sold rose 61.9% year over year to $1.76 billion. Gross profit increased 45.5% to $435 million, while gross margin contracted to 19.8% from 21.6%. Adjusted gross profit was $440 million, 44.3% higher than the year-ago quarter.

Selling, general and administrative expenses increased 40.1% to $199 million. Operating profit rose 30.7% to $183 million, although operating margin declined to 8.3% from 10.1%. Adjusted operating profit increased to $260 million from $168 million in the year-ago quarter, with adjusted operating margin slipping to 11.9% from 12.1%.

Adjusted EBITDA increased 13.9% year over year on a pro forma basis to $286 million. The adjusted EBITDA margin was 13%, reflecting improvements in Materials Processing and Specialty Vehicles, partly offset by weakness in Environmental Solutions.

Terex’s Segment Performances in Q3

Environmental Solutions revenues declined 8% year over year to $400 million, primarily due to lower refuse collection vehicle shipments, partly offset by higher utilities product sales.

Adjusted EBITDA fell to $61 million from $83 million, with margin contracting to 15.3% from 19.2%. Unfavorable product mix, production ramp-up inefficiencies in Utilities, lower production absorption and inflationary pressures weighed on profitability.
Materials Processing revenues increased 4.1% year over year to $434 million. On a pro forma basis, sales improved 11.3%, supported by higher shipments across most product categories, particularly Aggregates in North America.

Adjusted EBITDA rose to $84 million from $56 million, while margin expanded to 19.3% from 13.5%. Higher volumes, favorable mix, pricing discipline and improved production absorption supported results.

Specialty Vehicles generated revenues of $657 million, up 8.1% year over year on a pro forma basis, supported by increased fire apparatus and recreational vehicle shipments.

Adjusted EBITDA was $105 million compared with pro forma earnings of $79 million a year ago. Margin improved to 16% from 13%, reflecting operational efficiencies and pricing discipline despite inflationary pressures.

Aerials revenues surged 32% to $709 million, driven by strong demand from national customers and increased capital spending on large projects. Adjusted EBITDA rose to $62 million from $56 million.

However, adjusted EBITDA margin contracted to 8.7% from 10.5% due to unfavorable customer mix, inflation and tariff-related pressures. Terex continues to advance the proposed separation of Aerials, engaging with multiple strategic counterparties.

TEX Generates Strong Free Cash Flow, Boosts Buybacks

Operating cash flow increased to $241 million in the third quarter from $154 million a year ago. Free cash flow rose 60.8% to $209 million, supported by improved working capital efficiency.

Terex ended the third quarter of 2026 with cash and cash equivalents of $407 million and total liquidity of $1.2 billion. The company reduced debt by $113 million during the quarter.

Terex returned $91 million to shareholders through dividends and repurchases. Its board authorized an additional $500 million share repurchase program, bringing total available authorization to $611 million.

Terex Refines 2026 Outlook on Strong Demand

Terex expects 2026 revenues of $8-$8.2 billion, representing approximately 8.5% pro forma growth at the midpoint. Adjusted EBITDA is projected at $930-$960 million, implying approximately 10% pro forma growth and an 11.7% margin at the midpoint.
Management expects adjusted earnings of $4.80-$5 per share and free cash flow of $360-$400 million.

The outlook incorporates approximately $28 million in realized synergies during 2026. Terex remains on track to achieve $75 million in annualized synergies within two years, supported by integration initiatives and improved operating execution.

TEX Stock’s Price Performance & Zacks Rank

Terex's shares have gained 22.5% over the past year compared with the industry’s 0.7% growth.

Image Source: Zacks Investment Research

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

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Terex’s Industry Peers in Q3

Caterpillar Inc. (CAT Quick QuoteCAT - Free Report) reported adjusted earnings of $7.20 per share for the third quarter of 2026, up 45.5% year over year. The figure surpassed the Zacks Consensus Estimate of $7.12 by 1.12%. Higher sales volume and favorable price realization supported the performance. 

Caterpillar’s sales and revenues increased 17.3% to $20.68 billion, surpassing the consensus estimate of $20.58 billion by 0.48%. Caterpillar's order backlog surged 95.7% year over year to a record $78.1 billion, reflecting strong order rates.

Komatsu (KMTUY Quick QuoteKMTUY - Free Report) reported an 8% year-over-year improvement in earnings per share to 68 cents in the September-ended quarter. The figure also surpassed the Zacks Consensus Estimate of 64 cents by 6.25%. Revenues were reported at $7 billion compared with $6.66 billion in the year-ago quarter.

A Manufacturing & Construction Stock Awaiting Results

Astec Industries (ASTE Quick QuoteASTE - Free Report) is expected to release its third-quarter 2026 results on Nov. 5, 2026. The Zacks Consensus Estimate for Astec’s earnings is pegged at 50 cents per share, indicating a 6.4% improvement from the year-ago quarter.

The consensus estimate for Astec’s top line is pegged at $377.4 million, indicating a 7.8% rise from the prior year’s actual.  Astec has a trailing negative four-quarter average surprise of 0.4%.