Terex (NYSE:TEX) Corporation's shares climbed 5% as the company reported a 45.8% year-over-year improvement in earnings per share (EPS) at $1.75 for Q3 2023, beating the Zacks Consensus Estimate of $1.67. The firm's revenues also experienced a 15.1% year-over-year increase, reaching $1,290 million, driven by robust demand across various businesses and improved price realization, despite higher costs.
The company's operating profit reached $163 million, marking a 35.1% increase from the previous year, with an operating margin of 12.7%, up from last year's 10.8%. This growth was attributed to higher sales volume and price realization, although rising costs slightly offset these gains.
In terms of specific segments, the Aerial Work Platforms division saw revenues of $751 million in the reported quarter, a 13.3% increase from the same period last year due to solid demand and improvements in the Genie supply chain. The segment reported an operating profit of $93.6 million.
Meanwhile, the Material Processing segment’s revenues totaled $541 million, reflecting an 18.2% growth year-over-year due to strong demand for the company’s products across multiple businesses. The segment reported an operating income of $91.3 million.
However, Terex reported a backlog of $3.3 billion in Q3 2023, which fell slightly short of the projected $3.4 billion figure. The cost of goods sold rose by 12.9 % year over year to $998 million while gross profit increased by 23.4% to reach $293 million.
The company had cash and cash equivalents of $352 million as of September 30, 2023, compared with $304 million as of December 31, 2022. Terex generated $269 million in cash from operating activities in the first nine months of 2023 and has returned $66 million to shareholders through share repurchases and dividends so far this fiscal year.
Based on its strong performance this fiscal year, Terex raised its outlook for 2023 to an EPS of $7.05 and sales of $5.15 billion. Over the past year, Terex's shares have gained 25.2%, outperforming the industry’s growth of 7.6%. Despite this performance, Terex currently carries a Zacks Rank #3 (Hold).
InvestingPro Insights
According to InvestingPro's real-time data, Terex Corporation has a robust market capitalization of $3420M. The company's P/E ratio stands at 7.1, indicating a relatively low earnings multiple, which is a positive sign for potential investors. Over the last twelve months as of Q3 2023, Terex has demonstrated impressive revenue growth of 22.82%.
InvestingPro Tips shed further light on the company's performance. Terex has a perfect Piotroski Score of 9, an indicator of the company's financial health. The revenue growth appears to be accelerating, and the company yields a high return on invested capital. Moreover, the company's strong earnings are expected to allow management to continue dividend payments.
For those interested in more detailed insights, InvestingPro offers 17 additional tips related to Terex's performance. These include information on the company's earnings per share, dividend history, return on assets, and more. For more comprehensive advice, consider exploring InvestingPro's full range of tips and data.
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