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Terex (TEX) Q3 Earnings Miss Estimates, Lowers '21 View

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Terex Corporation TEX reported third-quarter 2021 adjusted earnings per share of 67 cents, which missed the Zacks Consensus Estimate of 71 cents. However, the bottom line improved a whopping 116% from the prior-year quarter, courtesy of strong demand and order growth.

Operational Update

Revenues in the reported quarter increased 30% year over year to $994 million but missed the Zacks Consensus Estimate of $1,018 million.

Cost of goods sold increased 32% year over year to $815 million. Gross profit went up 22% year over year to $178 million.

Terex Corporation Price, Consensus and EPS Surprise

Terex Corporation Price, Consensus and EPS Surprise
Terex Corporation Price, Consensus and EPS Surprise

Terex Corporation price-consensus-eps-surprise-chart | Terex Corporation Quote

Selling, general and administrative expenses (SG&A) were $104 million in the quarter under review, down 5% from the prior-year quarter. Terex reported an operating profit of $74.2 million, which soared 103% from $36.5 million in the last-year quarter.

Segmental Performance

The Aerial Work Platforms segment generated revenues of $573 million in the reported quarter, up 29% from the year-ago quarter. The segment reported an operating profit of $35 million compared with the prior-year quarter’s $13 million.

The Material Processing segment’s revenues totaled $419 million, reflecting year-over-year growth of 34%. The segment reported an operating income of $57 million, up 42% year over year.

Financial Position

Terex had cash and cash equivalents of $553 million as of Sep 30, 2021, compared with $665 million as of Dec 31, 2020. The company generated $324 million of cash from operating activities in the first nine months of 2021 compared with $89 million in the prior-year comparable period. Long-term debt was $888 million as of Sep 30, 2021, compared with $1,166.2 million as of Dec 31, 2020.

Guidance

The company noted that end-market demand remains strong backed by the significant year-over-year growth in orders, backlog and a robust book-to-bill ratio. However, its ability to meet this high level of demand is being impacted by the ongoing supply chain, labor, freight and logistics challenges. The company continues to implement price hikes and cut down costs. Due to the current scenario, Terex lowered guidance for 2021 earnings per share to the range of $2.75 to $2.85, from the prior expectation of $2.85-$3.05.

The company now expects sales to be around $3.85 billion in 2021, down from its previous expectation of $3.9 billion in 2021.

Price Performance

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Zacks Investment Research

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Terex's shares have soared 86.4% over the past year, compared with the industry’s rally of 26.7%.

Zacks Rank and Stocks to Consider

Terex currently carries a Zacks Rank #5 (Strong Sell).

Some better-ranked stocks in the Industrial Products sector include The Manitowoc Company, Inc. MTW, Nordson Corporation NDSN and DXP Enterprises, Inc. DXPE. 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.

Manitowoc has an anticipated earnings growth rate of 340% for fiscal 2021. The company’s shares have surged around 191% in a year.

Nordson has an estimated earnings growth rate of 45% for the ongoing fiscal year. The company’s shares have gained 30% in the past year.

DXP Enterprises has a projected earnings growth rate of 78% for the current year. The stock has appreciated around 109% in a year’s time.


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