Terex Updates 2005 Performance and 2006 Outlook
Published in: Associated Equipment Distributors
Date: 3/13/2006
Terex Corp. has announced its updated 2005 full year earnings and 2006 outlook.
The company expects to report 2005 revenues of approximately $6.4 billion, an increase of roughly 28 percent from revenue of $5.0 billion for 2004. Net debt (defined as total debt less cash) decreased by $209 million during the year, with $192 million of this reduction occurring in the fourth quarter.
Highlights include:
Record revenue in 2005 of $6.4 billion
Full-year 2005 earnings expected to increase approximately 64% versus 2004,
excluding special items
Net debt at December 31, 2005 decreased $209 million to $571 million
Backlog increased 62% compared with 2004, to $1,643 million
In general, 2005 was a very good year for Terex, reflecting continued strengthening end markets in many of our product categories and the early stages of a recovery in others, says Ronald M. DeFeo, Terexs Chairman and CEO. In 2003, we set out to achieve $6 billion in revenue by 2006. We have already surpassed that objective in 2005. We continue to benefit from an operating environment that is poised to produce another year of significant growth, as evidenced by our backlog of approximately $1.6 billion at the end of 2005, up 62% from our backlog at the end of 2004. We have maintained our focus on improving the balance sheet, and thus have reduced our net debt by $209 million in 2005 and anticipate a net debt to total capitalization ratio of approximately 33% at December 31, 2005, a significant accomplishment for Terex.
Terex Construction: 2005 revenue increased approximately 23% as compared with 2004, reflecting generally strong year-over-year performance across many business units, especially the scrap handling, mobile crushing and screening and European telehandler product categories. Fourth quarter revenue was essentially flat when compared with the prior year, as Terex prepared to introduce several new products in this segment in January 2006. Terex Construction backlog as of December 31, 2005 was approximately $290 million, up approximately 9% from the prior year-end.
Terex Cranes: 2005 revenue increased approximately 18% as compared with 2004, reflecting a continued strong global tower crane market and modest improvement in the North American and international cranes business. Fourth quarter revenue grew approximately 8% as compared with the fourth quarter of 2004. Terex Cranes backlog as of December 31, 2005 was approximately $452 million, up 80% versus the prior year-end, highlighted by the strengthening of the North American market.
Terex Aerial Work Platforms: Terex Aerial Work Platforms continued its strong 2005 performance, posting a year-over-year revenue increase of over 56%, continuing to reflect the sharp increase in demand for these products by the rental channel. For the fourth quarter, revenue increased over 60% as compared with the fourth quarter of 2004. Terex Aerial Work Platforms backlog as of December 31, 2005 was approximately $482 million, more than three times the backlog at the prior year-end.
2006 Outlook
It is our expectation that Terexs total revenue for 2006 will be between $6.7 and $7.1 billion, as we continue to focus on margin improvement over increases in volume alone, with earnings per share in the range of $5.50 to $6.00 per share, excluding special items such as the costs associated with the early retirement of debt that we plan for 2006, continued Mr. DeFeo. Expectations are for earnings in the first half of 2006 to be slightly less than our earnings in the second half of 2006. Additionally, expectations are for our first quarter results to be approximately one-third of our first half guidance.