Company Segments - The company operates in three segments: Materials Processing (MP), Aerial Work Platforms (AWP), and Environmental Solutions Group (ESG) [10] - The MP segment includes products such as crushers, washing systems, and material handlers, serving construction, mining, and recycling industries [11] - The AWP segment offers aerial work platform equipment, enhancing safety and productivity for various construction and maintenance applications [14] - The ESG segment focuses on waste and recycling equipment, including refuse collection bodies and compaction systems, targeting the solid waste industry [16] Financial Performance and Strategy - The company aims for a net leverage target of 2.5x through the cycle, balancing growth investments and efficient capital return to stockholders [27] - The total backlog as of December 31, 2024, was $2,291 million, a decrease of $1,120 million from $3,411 million in 2023 [44] - The Materials Processing (MP) backlog decreased approximately 58% from $767 million in 2023 to $320 million in 2024 [47] - The Aerial Work Platforms (AWP) backlog decreased approximately 45% from $2,644 million in 2023 to $1,451 million in 2024 [48] - The Environmental Solutions Group (ESG) backlog was $520 million as of December 31, 2024 [49] - The company expects second half sales in 2025 to be higher than first half sales, with stronger demand anticipated in the second quarter due to seasonal project spending [69] Innovation and Product Development - The company emphasizes digital transformation and innovation to improve product offerings and operational efficiency [25] - The company is focusing on product innovation and has established robust product development pipelines to introduce new differentiated products in the coming years [56] - The company is developing alternative power solutions across its product range, including battery-electric and fuel-electric hybrid options, to reduce carbon footprints [55] - The company is actively investing in alternative energy solutions and developing products that meet increasingly stringent environmental regulations [66] Safety and Environmental Commitment - The company aims to achieve a lost time injury rate of 0.4 and a total recordable injury rate of 1.4 by the end of 2026, with current rates at 0.37 and 1.49 respectively [71] - The company is committed to reducing greenhouse gas emissions and has developed all-electric utility bucket trucks, which support electrification and sustainability goals [66] - The company maintains a commitment to safety and environmental stewardship, ensuring compliance with health, safety, and environmental laws [63] - The company is committed to complying with environmental laws and regulations, conducting environmental audits at least once every five years [64][68] Workforce and Culture - The company has approximately 11,400 team members, with 88% participating in a global engagement survey, indicating a strong focus on team member engagement [73] - The company has a robust talent review process and offers a wide range of training programs to support team member development [74] - The company emphasizes a culture of inclusion and diversity, aiming to create a supportive and non-discriminatory workplace [77] Legal and Compliance - The company is engaged in various legal proceedings regarding intellectual property rights but does not expect a material adverse effect on its business [62] - The company’s engineering teams are focused on delivering customer-responsive solutions and complying with evolving regulatory standards [54] Customer Focus - In 2024, the largest customer accounted for less than 6% of consolidated net sales, and the top ten customers collectively accounted for less than 29% [60] - The company operates under a best value strategy, focusing on improving customer return on invested capital (ROIC) through quality by design [59] - The company offers a range of services for its products, including inspections, maintenance, and training services [39][43]

Core Insights - Terex Corporation reported adjusted earnings per share of 77 cents, exceeding the Zacks Consensus Estimate of 76 cents, but a significant decline of 45% from the prior-year quarter due to lower volumes [1][2] - Revenues increased by 1.5% year over year to $1.24 billion, surpassing the Zacks Consensus Estimate of $1.23 billion, aided by the acquisition of Environmental Solutions Group (ESG) [3][15] - The company experienced margin contraction, with gross profit falling 11.5% to $236 million and operating profit plunging 54% to $53 million [5][6] Financial Performance - The cost of goods sold rose 8.7% year over year to $1.04 billion, leading to a decline in gross profit [5] - Adjusted operating profit was $97 million, down from $132.7 million in the previous year, with an adjusted operating margin of 7.8%, a contraction of 310 basis points [6] - Terex's adjusted earnings per share for 2024 declined 13.5% year over year to $6.11, beating the Zacks Consensus Estimate of $6.09 [13][14] Segment Performance - The Material Processing segment's revenues fell 21% year over year to $439 million, attributed to channel adjustments and weak end-market demand [7] - The Aerial Work Platforms segment generated revenues of $573 million, down 13.2% from the previous year, impacted by delivery schedule adjustments [9][10] - The ESG segment reported revenues of $228 million, with an operating profit of $12 million, both figures exceeding initial estimates [10] Cash Flow and Balance Sheet - As of December 31, 2024, Terex had cash and cash equivalents of $388 million, an increase from $371 million a year earlier [12] - The company generated $326 million in cash from operating activities in 2024, down from $459 million in the prior year [12] 2025 Outlook - Terex expects sales for the Materials Processing segment to decline by high single digits from a baseline of $1.9 billion, while the AWP segment's revenues are projected to decline in low double digits from a baseline of $2.41 billion [16] - Net sales are projected to be between $5.3 billion and $5.5 billion, indicating a potential year-over-year growth of 6% at the midpoint [16] - Adjusted earnings per share guidance for 2025 is set between $4.70 and $5.10, reflecting a year-over-year drop of 20% at the midpoint [17]

Financial Data and Key Metrics Changes - For Q4 2024, the company reported total net sales of $1.2 billion, slightly up from the prior year due to the addition of ESG [31] - Full year net sales reached $5.1 billion, generally in line with 2023, with a gross margin of 21.7%, which is 120 basis points lower year-over-year [35] - Earnings per share for the year was $6.11, marking the second highest in the company's history [37] - Free cash flow for the quarter was $129 million, down from $135 million in Q4 2023, while full year free cash flow was $190 million, a decrease from the previous year [34][38] Business Line Data and Key Metrics Changes - AWP sales for the year were $3 billion, representing a 3% growth compared to 2023, with an operating margin of 11.6% [38] - MP full year sales were $1.9 billion, down 14.6% from the prior year, with a solid operating margin of 13.6% despite lower volume [41] - ESG achieved a 21.9% operating margin on net sales of $228 million, indicating significant growth and profitability improvement [43] Market Data and Key Metrics Changes - Approximately 25% of revenue now comes from waste and recycling markets, characterized by low cyclicality and steady growth [14] - The company noted a generally weak economic environment in Europe, while emerging markets like India and Southeast Asia showed increasing adoption of their products [19] Company Strategy and Development Direction - The company is focused on integrating ESG into its operations and expects to deliver at least $25 million in operational run rate synergies by the end of 2026 [14][25] - The revised strategy emphasizes evaluating the global footprint, reducing fixed costs, and improving operational performance [22] - The company anticipates significant infrastructure investments in the U.S. and is optimistic about the long-term growth outlook despite current macroeconomic challenges [20][21] Management's Comments on Operating Environment and Future Outlook - Management highlighted the impact of elevated interest rates and uncertainty around the Fed's outlook as macro headwinds, but noted strong public sector spending on infrastructure [16] - The sentiment improved following the U.S. elections, with expectations for regulatory easing and growth encouragement from the new administration [17] - For 2025, the company expects net sales of approximately $5.4 billion and EBITDA of roughly $660 million, with a segment operating margin of about 12% [51] Other Important Information - The company maintained a solid balance sheet with a year-end leverage ratio of 2.6 times and plans to deleverage in future periods [45] - The current backlog stands at $2.3 billion, with a healthy $520 million for ESG and $1.8 billion for legacy businesses [48] Q&A Session Summary Question: Comments on ESG margin sustainability and share performance - Management confirmed strong ESG performance and indicated that margins are expected to remain robust moving into 2025, with no significant changes anticipated [65][68] Question: Impact of tariffs on sourcing and manufacturing - Management discussed the company's ability to adapt to potential tariff changes, emphasizing a strong U.S. manufacturing base and optionality in production [74][75] Question: AWP order trends and customer fleet management - Management noted a return to normal seasonal patterns for AWP, with expectations for strong order intake and healthy fleet utilization [84][85] Question: Outlook for Europe and demand dynamics - Management expects Europe to remain soft in 2025, with some signs of improvement in specific markets, but overall demand is anticipated to be weak [92] Question: ESG growth expectations and synergy capture - Management reiterated confidence in ESG's performance and the expected synergies from the acquisition, with no changes to the initial guidance [162] Question: Clarification on decremental margins and operating performance - Management clarified that while Q1 may see lower margins, they expect to return to within the 25% decremental margin target for the remainder of the year [133][138]

Q4 2024 Earnings Conference Call February 6, 2025 Forward Looking Statements Certain information in this presentation includes forward-looking statements (within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 (the "Exchange Act") and the Private Securities Litigation Reform Act of 1995) regarding future events or our future financial performance that involve certain contingencies and uncertainties, including those discussed in our Annual Report o ...

Core Insights - Terex reported revenue of $1.24 billion for the quarter ended December 2024, reflecting a 1.5% increase year-over-year and a surprise of +0.63% over the Zacks Consensus Estimate of $1.23 billion [1] - The earnings per share (EPS) for the quarter was $0.77, down from $1.41 in the same quarter last year, with an EPS surprise of +1.32% compared to the consensus estimate of $0.76 [1] Financial Performance Metrics - Net sales for Aerial Work Platforms (AWP) were $573 million, exceeding the average estimate of $547.92 million, but showing a year-over-year decline of -13.2% [4] - Net sales for Materials Processing & Mining (MP) were $439 million, slightly below the average estimate of $450 million, representing a year-over-year decrease of -20.9% [4] - Net sales for Corporate and Other / Eliminations were reported at $1 million, significantly higher than the average estimate of $51.09 million, indicating a year-over-year change of +12400% [4] - Income from Operations for AWP was $18 million, compared to the average estimate of $20.54 million [4] - Income from Operations for Corporate and Other / Eliminations was -$24 million, worse than the average estimate of -$9.03 million [4] - Income from Operations for MP was $47 million, below the average estimate of $63.21 million [4] Stock Performance - Terex shares have returned +6.8% over the past month, outperforming the Zacks S&P 500 composite's +2.1% change [3] - The stock currently holds a Zacks Rank 5 (Strong Sell), suggesting potential underperformance relative to the broader market in the near term [3]

Core Viewpoint - Terex (TEX) reported quarterly earnings of $0.77 per share, exceeding the Zacks Consensus Estimate of $0.76 per share, but down from $1.41 per share a year ago, indicating a 45.4% year-over-year decline in earnings [1] Group 1: Earnings Performance - The quarterly earnings surprise was 1.32%, with a previous quarter surprise of 14.96% when actual earnings were $1.46 per share against an expectation of $1.27 [1][2] - Over the last four quarters, Terex has surpassed consensus EPS estimates four times [2] - The company posted revenues of $1.24 billion for the quarter, surpassing the Zacks Consensus Estimate by 0.63%, and showing a slight increase from $1.22 billion year-over-year [2] Group 2: Future Outlook - The sustainability of Terex's stock price movement will depend on management's commentary during the earnings call and future earnings expectations [3] - Current consensus EPS estimate for the upcoming quarter is $1.22 on revenues of $1.36 billion, and for the current fiscal year, it is $5.23 on revenues of $5.43 billion [7] - The estimate revisions trend for Terex is currently unfavorable, resulting in a Zacks Rank 5 (Strong Sell), indicating expected underperformance in the near future [6] Group 3: Industry Context - The Manufacturing - Construction and Mining industry, to which Terex belongs, is currently in the bottom 10% of Zacks industries, which may negatively impact stock performance [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, suggesting that industry outlook can significantly affect stock performance [5][8]

Financial Performance - The company reported earnings per share of $6.11 on sales of $5.1 billion for the full year, marking the second highest EPS performance in its history [10][37] - In Q4, total net sales were $1.2 billion, slightly up from the prior year due to the addition of ESG, while legacy segment sales were down 17% [31][32] - Gross margin for Q4 was 19%, reflecting lower margins in legacy segments, partially offset by accretive margins from ESG [32] - Full year gross margin was 21.7%, down 120 basis points year-over-year due to volume and unfavorable mix in legacy segments [35] - Free cash flow for Q4 was $129 million, down from $135 million in Q4 2023, while full year free cash flow was $190 million, down from the previous year [34][38] Business Segment Performance - Aerial Work Platforms (AWP) sales for the year were $3 billion, representing 3% growth compared to 2023, with an operating margin of 11.6% [38] - The Material Processing (MP) segment saw full year sales of $1.9 billion, down 14.6% due to industry-wide adjustments and macroeconomic challenges in Europe [41] - ESG achieved a 21.9% operating margin on net sales of $228 million in Q4, indicating strong growth and profitability improvement [43] Market Insights - The company noted a strong public sector spending on infrastructure and utilities, but private projects are being impacted by elevated interest rates [16][17] - North America accounts for over two-thirds of revenue, and a strong U.S. economy is seen as a tailwind [17] - Europe is expected to remain weak, although there are signs of improvement in emerging markets like India and Southeast Asia [19][92] Strategic Direction - The company is focused on integrating ESG and expects to deliver at least $25 million in operational run rate synergies by the end of 2026 [14][25] - The revised strategy emphasizes evaluating the global footprint, reducing fixed costs, and enhancing operational efficiency [22][23] - The company anticipates a $40 billion addressable market with significant growth potential across its segments [25] Management Commentary - Management expressed confidence in the long-term growth outlook despite short-term adjustments in legacy markets [20] - The company is optimistic about the impact of the new administration's focus on infrastructure investments [21] - Management highlighted the importance of maintaining a disciplined pricing strategy in light of potential tariffs [120] Other Important Information - The company maintained a solid balance sheet with a year-end leverage ratio of 2.6 times and plans to deleverage as cash flow increases [45] - The current backlog stands at $2.3 billion, with $520 million attributed to ESG, indicating strong future demand [48] Q&A Session Summary Question: Comments on ESG margin sustainability - Management noted that ESG is performing exceptionally well, with no significant mix issues affecting margins [66][68] Question: Impact of tariffs on sourcing - Management emphasized the company's U.S.-based manufacturing capabilities and optionality to mitigate potential tariff impacts [74][75] Question: AWP order trends and customer fleet management - Management indicated a return to normal seasonal patterns, with strong order intake and healthy fleet utilization [84][86] Question: Outlook for Europe - Management expects Europe to remain soft in 2025, with some signs of demand for replacement equipment [91][92] Question: ESG growth expectations - Management confirmed that the ESG segment is expected to continue strong performance, with no changes to the initial growth outlook [118] Question: Clarification on decremental margins - Management clarified that while Q1 may see lower margins, they expect to return to within the 25% decremental margin target in subsequent quarters [133][134]

Core Insights - Terex Corporation reported its fourth quarter and full-year 2024 results, highlighting a strategic focus on resilience and growth opportunities despite industry challenges [1][2] - The company achieved adjusted earnings per share of $6.11 for the full year, marking the second highest in its history, driven by strong portfolio performance [2][4] - For 2025, Terex anticipates net sales between $5.3 billion and $5.5 billion, with earnings per share projected between $4.70 and $5.10 [2][10] Fourth Quarter Operational and Financial Highlights - Fourth quarter net sales reached $1.2 billion, a 2% increase from the same period in 2023, primarily due to the acquisition of Environmental Solutions Group (ESG) [8] - Income from operations for Q4 2024 was $53 million, or 4.3% of net sales, down from $116 million, or 9.5% of net sales, in Q4 2023 [8][22] - Adjusted income from operations for Q4 2024 was $97 million, or 7.8% of net sales, compared to $133 million, or 10.9% of net sales in the prior year [8][22] Full-Year 2024 Operational and Financial Highlights - Total net sales for 2024 were $5.1 billion, slightly down from $5.2 billion in 2023, attributed to industry-wide channel adjustments [8][22] - Full-year income from operations was $526 million, or 10.3% of net sales, compared to $637 million, or 12.4% in the previous year [8][22] - The effective tax rate for 2024 was 17.8%, up from 10.9% in 2023, which included a benefit from operations in Switzerland [8][22] Business Segment Review - Materials Processing segment reported net sales of $439 million in Q4 2024, down 20.9% year-over-year, with income from operations of $47 million [8][27] - Aerial Work Platforms segment had net sales of $573 million in Q4 2024, down 13.2% year-over-year, with income from operations of $18 million [8][27] - The Environmental Solutions Group contributed $228 million in net sales for Q4 2024, with an operating margin of 5.3% [8][27] 2025 Outlook - Terex expects 2025 net sales to be between $5.3 billion and $5.5 billion, with an operating margin of approximately 12% [10][11] - The company anticipates free cash flow of $300 to $350 million for 2025 [10][11] - Segment sales outlook includes low double-digit declines for Aerials and high single-digit declines for Materials Processing, while ESG is expected to grow in the mid single digits [10][11]

Company Overview - Terex Corporation is a global industrial equipment manufacturer specializing in materials processing machinery, waste and recycling solutions, mobile elevating work platforms (MEWPs), and equipment for the electric utility industry [3] - The company designs, builds, and supports products used across various sectors including maintenance, manufacturing, energy, minerals and materials management, construction, waste and recycling, and the entertainment industry [3] - Terex provides lifecycle support through a global parts and services organization and offers digital solutions to maximize customer investment returns [3] Environmental Initiatives - Certain Terex products and solutions are designed to reduce environmental impact, including electric and hybrid offerings that provide quiet and emission-free performance [3] - The company also offers products that support renewable energy and aid in the recovery of useful materials from various types of waste [3] Upcoming Financial Results - Terex Corporation will host a conference call to review its fourth quarter and year-end 2024 financial results on February 6, 2025, at 8:30 a.m. Eastern Time [1] - Financial results will be available on the company's investor relations website prior to the call [2] - Participants are encouraged to access the webcast 15 minutes before the start time, with a replay available afterward [2]

Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value ...