Tags: Terex | building | surge | TEX

Terex Rides International Building Surge

Friday, 13 Jan 2012 07:38 AM

By Constance Gustke

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Construction and infrastructure industries are booming internationally. Terex (TEX) is building strong momentum there, with more than 73 percent of 2010 sales of cranes, heavy-duty utility vehicles, and the like coming from an international building surge. The year ahead looks like another double-digit sales growth period for the Connecticut firm, say analysts.

Terex only restarted its growth engine in 2011, though. But the outfit is now firmly in the black following two years of quarterly losses. Terex also had a $2.1 billion order backlog year-over-year at the end of September, fueled by a number of its highly cyclical offerings.

Crane sales were strong in China, India and Germany. And Terex’s aerial work platforms, which are used in construction, had solid gains in Europe and the Middle East.

Rejuggling product mixes is part of Terex’s growth strategy. Last year, it plowed $1.1 billion into a German crane and material handling equipment maker. In 2010, Terex sold its mining equipment business to finance acquisitions.

The strategy is paying off. Third-quarter net sales climbed 68 percent to $1.8 billion vs. $1.1 billion a year ago. Earnings per share was 30 cents. Terex is focused on margin expansion and continued cash generation, noted Terex CEO Ronald DeFeo.

Emerging markets

Of the 21 analysts followed by Thomson/First Call, three have strong buy recommendations for Terex and three have buys, with 15 holds.

S&P has a buy rating, citing sales growth driven by construction spurts in emerging markets and the replacing of aging fleets in North America.

The company reports next on Feb. 8.

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