Terex (TEX) Q4 Earnings & Revenues Down Y/Y, Shares Dip
Terex Corporation’s TEX fourth-quarter 2020 adjusted earnings per share slumped 42% year over year to 21 cents. The Zacks Consensus Estimate for the quarter was break even earnings per share. The company’s shares dipped 1.6% following the dismal earnings.
Including one-time items, the company had reported earnings per share of 26 cents in fourth-quarter 2019. There were no such items in fourth-quarter 2020.
Operational Update
Revenues in the fourth quarter declined 11% year over year to $787 million. However, the top line beat the Zacks Consensus Estimate of $755 million. The company, however, witnessed an improvement of 18% in bookings and rise of 25% in backlog on a year-over-year basis.
Terex Corporation Price, Consensus and EPS Surprise
Terex Corporation price-consensus-eps-surprise-chart | Terex Corporation Quote
Cost of goods sold went down 11% year over year to $638 million. Gross profit fell 11.7% year over year to $149 million.
Selling, general and administrative expenses was $118 million in the quarter under review compared with an adjusted figure of $133 million in the prior-year quarter. Terex reported an operating profit of $31.6 million, reflecting a decline of 13% from the year-ago quarter’s adjusted figure of $36.3 million. Operating margin came in at 4.0%, flat compared with the year-earlier quarter.
Adjusted EBITDA in the fourth quarter of 2020 was $43.5 million compared with $46.1 million in fourth-quarter 2019. Adjusted EBITDA margin was 5.5% in the quarter under review compared with 5.2% the year-ago quarter.
Segmental Performance
The Aerial Work Platforms segment generated revenues of $412 million in the fourth quarter, down 18% from the year-ago quarter. The segment reported an operating loss of $2 million compared with the prior-year quarter’s profit of $4.4 million.
The Material Processing segment’s revenues totaled $366 million, reflecting a year-over-year decline of 3%. The segment reported an operating income of $55 million, up 22% year over year aided by strong operational performance despite lower revenues.
Financial Position
Terex had cash and cash equivalents of $665 million as of Dec 31, 2020, compared with $535 million as of Dec 31, 2019. The company generated $225 million of cash from operating activities in 2020 compared with the $173 million last year. Long-term debt was $1,166 million as of Dec 31, 2020, compared with $1,169 million as of Dec 31, 2019.
Terex’s board of directors has reinstated its quarterly dividend for 2021. The quarterly dividend of 12 cents per share will be paid on Mar 19, 2021 to all shareholders of record as of the close of business on Mar 5, 2021.
2020 Results
Terex’s adjusted earnings per share in 2020 was 13 cents, a significant drop from the prior-year’s figure of $3.25. However, the bottom line compared favorably with the Zacks Consensus Estimate of a loss of 9 cents per share. Including one-time items, the company delivered earnings per share of 13 cents in 2020 compared with $2.92 in 2019.
Sales plunged 29% year over year to $3.08 billion from the prior-year figure of $4.35 billion. The top line beat the Zacks Consensus Estimate of $3.05 billion.
Guidance
Terex expects improving customer sentiment to drive customer demand for its products and services. The company expects sales to be around $3.45 billion in 2021, which indicates year-over-year growth of 12%. Earnings per share is expected to be in the range of $1.95 to $2.35 for the ongoing year, which suggests a substantial improvement from earnings of 13 cents reported in 2020.
Price Performance
Terex's shares have appreciated 44.2% over the past year, compared with the industry’s rally of 41.2%.
Zacks Rank and Stocks to Consider
Terex currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Industrial Products sector include Mueller Industries, Inc. MLI, AGCO Corporation AGCO and Myers Industries, Inc. MYE, each carrying a Zacks Rank #1 (Strong Buy), currently. You can see the complete list of today’s Zacks #1 Rank stocks here.
Mueller Industries has a projected earnings growth rate of 1% for the current year. Shares of the company have gained 16% over the past year.
AGCO has an estimated earnings growth rate of 30% for 2021. The company’s shares have rallied 76% in the past year.
Myers Industries has an expected earnings growth rate of 16% for the ongoing year. In the past year, the stock has surged 33%.
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