Terex Corporation (TEX) has reported an 122.02 percent jump in profit for the quarter ended Sep. 30, 2016. The company has earned $96.80 million, or $0.89 a share in the quarter, compared with $43.60 million, or $0.40 a share for the same period last year. On an adjusted basis, earnings per share were at $0.19 for the quarter compared with $0.44 in the same period last year.
Revenue during the quarter dropped 15.85 percent to $1,056.40 million from $1,255.40 million in the previous year period. Gross margin for the quarter contracted 270 basis points over the previous year period to 17.41 percent. Total expenses were 96.25 percent of quarterly revenues, up from 92.66 percent for the same period last year. That has resulted in a contraction of 359 basis points in operating margin to 3.75 percent.
Operating income for the quarter was $39.60 million, compared with $92.10 million in the previous year period.
"Our Aerial Work Platforms (AWP) and Materials Processing (MP) segments performed in line with expectations, while our Cranes segment performance was negatively impacted by more challenging markets than we anticipated and operational factors," said John L. Garrison, Terex president and chief executive officer. Mr. Garrison added, "We further tightened the focus of our portfolio with the sale of our German Compact Construction business, and are progressing toward the planned completion of the MHPS sale in early 2017. We are also moving forward with the evaluation and simplification of our manufacturing footprint. During 2016, we successfully moved our mobile crane production from Waverly, Iowa to Oklahoma City, Oklahoma. "Given the market dynamics and the challenges we are facing in our Cranes segment, we expect our full year earnings to be $0.70 to $0.80 per share, excluding the restructuring and other unusual items and to generate free cash flow of $150 to $200 million," Mr. Garrison concluded.
Operating cash flow turns positive
Terex Corporation has generated cash of $90.80 million from operating activities during the nine month period as against cash outgo of $56.60 million in the last year period.
The company has spent $2.70 million cash to meet investing activities during the nine month period as against cash outgo of $144.10 million in the last year period.
The company has spent $217.30 million cash to carry out financing activities during the nine month period as against cash inflow of $53.20 million in the last year period.
Working capital declines
Terex Corporation has witnessed a decline in the working capital over the last year. It stood at $1,445 million as at Sep. 30, 2016, down 17.75 percent or $311.80 million from $1,756.80 million on Sep. 30, 2015. Current ratio was at 1.98 as on Sep. 30, 2016, down from 2.10 on Sep. 30, 2015.
Days sales outstanding went down to 55 days for the quarter compared with 89 days for the same period last year.
Debt comes down
Terex Corporation has recorded a decline in total debt over the last one year. It stood at $1,663.50 million as on Sep. 30, 2016, down 12.34 percent or $234.10 million from $1,897.60 million on Sep. 30, 2015. Total debt was 29.87 percent of total assets as on Sep. 30, 2016, compared with 32.28 percent on Sep. 30, 2015. Debt to equity ratio was at 0.87 as on Sep. 30, 2016, down from 0.99 as on Sep. 30, 2015. Interest coverage ratio deteriorated to 1.56 for the quarter from 3.58 for the same period last year.
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