Terex Swings To 1Q Loss As Sales Plummet; Revenue View Cut

Terex Corp. (TEX) swung to a first-quarter loss as the weak economy led to big sales declines across the construction- and mining-equipment maker's segments.

That weakness has continued into the second quarter, prompting the company to cut its revenue guidance for the quarter. It now expects a 40% to 45% drop, worse than the 30% to 35% decline previously expected.

Shares fell 5.8% to $11.40 in after-hours trading as the latest quarter's results fell short of analysts' expectations. The stock has lost more than three-quarters of its value from September and last month hit its lowest trading level since 2003.

Terex, which has been hurt from a drop in demand amid tighter credit availability, has cut jobs and inventories since June. But the size of the demand shift caught the company off guard. However, the company gained some flexibility to deal with its recessionary issues when it amended its credit agreement in February.

Terex reported a net loss of $74.9 million, or 79 cents a share, compared with year-earlier net income of $163.3 million, or $1.59 a share. The latest quarter included 32 cents in restructuring-related charges.

Net sales fell 45% to $1.3 billion as declining demand for aerial work platforms, construction and materials processing continued. The stronger dollar also weighed down the figure by $194 million.

Analysts polled by Thomson Reuters expected a per-share loss of 11 cents on revenue of $1.53 billion.

Gross margins slumped to 11.1% from 21.8% on the sales woes.

"The turmoil from the global credit crisis and economic slowdown has quickly and deeply impacted sales for our industry, with certain sectors down almost 75% from year ago levels," Chairman and Chief Executive Ron DeFeo said. He added Terex is cutting costs and operating on a build-to-order basis in response.

Net sales at the biggest segment - aerial work platforms - fell 66%, while construction and cranes posted declines of 48% and 29%, respectively. Backlog is down 59% from a year ago and 33% from the fourth quarter at $1.59 billion.

- By John Kell and Jay Miller, Dow Jones Newswires; 201-938-5285; [e-mail]