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Terex (TEX) Cuts FY14 Outlook

September 15, 2014 8:06 AM EDT

Terex (NYSE: TEX) announced that it is lowering its full year 2014 guidance, as well as providing quarterly guidance for the third quarter. Full year 2014 earnings per share is now expected to be between $2.35 and $2.50, as adjusted for certain non-recurring items. Previous full year 2014 guidance was an earnings per share of between $2.50 and $2.80. Due to the timing of this announcement, the Company is also providing third quarter 2014 earnings per share guidance of $0.55 - $0.65 per share, excluding certain non-recurring items.

*** The Street sees FY14 EPS of $2.56.

The primary driver of the guidance change is weakness in the Cranes segment. Despite a positive trend in book-to-bill ratios over the first half of 2014, the Cranes order rate has dropped significantly in July and August. Additionally, Cranes customers in developing markets are struggling to secure financing for orders scheduled for delivery in the second half of 2014.

“We do not take lightly the need to adjust market expectations. Admittedly, the global Cranes marketplace has been challenging to forecast. During 2014, we have certainly seen more muted end markets in Cranes than we originally contemplated back in February. While we do see positive trends in certain aspects of our other segments, this has been more than offset by the recent weakness in Cranes end markets,” commented Ron DeFeo, Terex Chairman and CEO.

“The balance of our guidance remains intact, including our guidance for Free Cash Flow of between $200 and $250 million in 2014. We also remain positive on the longer term prospects for EPS growth in our business, driven in no small part by the internal improvement initiatives underway throughout our Company.”



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