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Terex's (TEX) Q4 Earnings Surpass Estimates, Sales Miss
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Terex Corporation (TEX - Free Report) reported adjusted earnings per share of 36 cents in fourth-quarter 2019 which beat the Zacks Consensus Estimate of 18 cents by a massive margin of 100%. However, the bottom line declined 55% from the prior-year quarter reflecting the ongoing challenging global market conditions for industrial equipment.
Including one-time items, the company reported earnings of 26 cents per share in the quarter, flat compared with the year-ago figure.
Operational Update
Revenues in the quarter declined 16% year over year to $885 million. Moreover, the company’s revenues missed the Zacks Consensus Estimate of $895 million.
Terex Corporation Price, Consensus and EPS Surprise
Cost of goods sold declined 14% to $716 million from $834 million in the prior-year quarter. Gross profit fell 21.4% year over year to around $169 million.
Selling, general and administrative expenses increased 9.5% to $146 million from $133 million in the prior-year quarter. Terex reported operating income of $22.9 million compared with $81.6 million in the year-ago quarter, reflecting a year-over-year decline of 72%. Operating margin was 2.6% in the reported quarter compared with 7.8% in in the prior-year quarter.
Segmental Performance
The Aerial Work Platforms (AWP) segment reported revenues of $500 million in the fourth quarter, down 21% from $631 million in the prior-year quarter. Operating income declined 88% to $4.4 million from the prior-year quarter.
The Material Processing (MP) segment’s revenues totaled $321 million, reflecting a year-over-year decline of around 10%. The segment reported operating income of $39 million, down 23% year over year.
Financial Position
Terex had cash and cash equivalents of $535 million at the end of 2019 compared with $340 million at 2018 end. In 2019, the company generated $173 million of cash from operating activities compared with $94 million in the prior year. Long-term debt was $1,169 million as of Dec 31, 2019, compared with $1,210.6 million as of Dec 31, 2018.
2019 Results
Terex reported adjusted earnings per share of $3.25 in 2019, down 20% from the prior year. Earnings beat the Zacks Consensus Estimate of $3.07. On a reported basis, including one-time items, earnings per share came in at $2.92 compared with $3.14 recorded in 2018.
Sales came in at $4,353 million in 2019 compared with the previous year’s $4,517 million. The top-line figure also missed the Zacks Consensus Estimate of $4,366 million.
2020 Guidance
Terex now projects earnings per share of $1.85-$2.35 for fiscal 2019 on net sales of approximately $3.9 billion. The company expects customers to remain cautious with their capital expenditure decisions in 2020.
Share Price Performance
Terex stock has declined 22% over the past year against the industry’s growth of 0.2%.
Northwest Pipe has an expected earnings growth rate of 19.5% for the current year. The stock has appreciated 50% over the past year.
Sharps Compliance has an estimated earnings growth rate of 767% for the ongoing year. In a year’s time, the company’s shares have gained 43%.
Graco has a projected earnings growth rate of 4.3% for 2020. The company’s shares have rallied 20% over the past year.
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Terex's (TEX) Q4 Earnings Surpass Estimates, Sales Miss
Terex Corporation (TEX - Free Report) reported adjusted earnings per share of 36 cents in fourth-quarter 2019 which beat the Zacks Consensus Estimate of 18 cents by a massive margin of 100%. However, the bottom line declined 55% from the prior-year quarter reflecting the ongoing challenging global market conditions for industrial equipment.
Including one-time items, the company reported earnings of 26 cents per share in the quarter, flat compared with the year-ago figure.
Operational Update
Revenues in the quarter declined 16% year over year to $885 million. Moreover, the company’s revenues missed the Zacks Consensus Estimate of $895 million.
Terex Corporation Price, Consensus and EPS Surprise
Terex Corporation price-consensus-eps-surprise-chart | Terex Corporation Quote
Cost of goods sold declined 14% to $716 million from $834 million in the prior-year quarter. Gross profit fell 21.4% year over year to around $169 million.
Selling, general and administrative expenses increased 9.5% to $146 million from $133 million in the prior-year quarter. Terex reported operating income of $22.9 million compared with $81.6 million in the year-ago quarter, reflecting a year-over-year decline of 72%. Operating margin was 2.6% in the reported quarter compared with 7.8% in in the prior-year quarter.
Segmental Performance
The Aerial Work Platforms (AWP) segment reported revenues of $500 million in the fourth quarter, down 21% from $631 million in the prior-year quarter. Operating income declined 88% to $4.4 million from the prior-year quarter.
The Material Processing (MP) segment’s revenues totaled $321 million, reflecting a year-over-year decline of around 10%. The segment reported operating income of $39 million, down 23% year over year.
Financial Position
Terex had cash and cash equivalents of $535 million at the end of 2019 compared with $340 million at 2018 end. In 2019, the company generated $173 million of cash from operating activities compared with $94 million in the prior year. Long-term debt was $1,169 million as of Dec 31, 2019, compared with $1,210.6 million as of Dec 31, 2018.
2019 Results
Terex reported adjusted earnings per share of $3.25 in 2019, down 20% from the prior year. Earnings beat the Zacks Consensus Estimate of $3.07. On a reported basis, including one-time items, earnings per share came in at $2.92 compared with $3.14 recorded in 2018.
Sales came in at $4,353 million in 2019 compared with the previous year’s $4,517 million. The top-line figure also missed the Zacks Consensus Estimate of $4,366 million.
2020 Guidance
Terex now projects earnings per share of $1.85-$2.35 for fiscal 2019 on net sales of approximately $3.9 billion. The company expects customers to remain cautious with their capital expenditure decisions in 2020.
Share Price Performance
Terex stock has declined 22% over the past year against the industry’s growth of 0.2%.
Zacks Rank and Stocks to Consider
Terex currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Industrial Products sector are Northwest Pipe Company (NWPX - Free Report) , Sharps Compliance Corp and Graco Inc. (GGG - Free Report) . All of these stocks sport a Zacks Rank #1 (Strong Buy), at present. You can see the complete list of today's Zacks #1 Rank stocks here.
Northwest Pipe has an expected earnings growth rate of 19.5% for the current year. The stock has appreciated 50% over the past year.
Sharps Compliance has an estimated earnings growth rate of 767% for the ongoing year. In a year’s time, the company’s shares have gained 43%.
Graco has a projected earnings growth rate of 4.3% for 2020. The company’s shares have rallied 20% over the past year.
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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