Terex Increases Q1 Estimate and Full-Year 2006 Guidance
May 3, 2006 — Terex Corp., Westport, Conn., recently announced that it expects first quarter 2006 earnings, excluding special items, to be in excess of its previously indicated guidance. This puts the company in the range of $1.55 to $1.60 per share, assuming an effective tax rate of 35%, on net sales of approximately $1.75 billion. Due to its improved expectations of first quarter performance, and given management's current outlook for the performance of its businesses for the remainder of 2006, Terex is also increasing its fiscal year 2006 earnings per share guidance range to $6.40 to $6.80 per share, excluding special items and assuming an effective tax rate of 35% — from the $5.85 to $6.35 per share range announced earlier this month.
Terex now anticipates approximately 52% of its earnings being delivered in the first half of the year and the balance occurring in the second half of the year. Net debt (consisting of long-term debt, including current portion of long-term debt, less cash and cash equivalents) at March 31, 2006 increased by approximately $46 million from December 31, 2005 levels, reflecting the increase in working capital investment in anticipation of the seasonally strong second quarter delivery period.
"We are very pleased with the broader, strong performance from our overall business," said Ronald M. DeFeo, Terex's chairman and CEO. "Our preliminary results were encouraging from most of our businesses, but especially our aerial work platforms group, which we expect to deliver a record earnings performance, and our materials processing & mining group, which executed their game plan extremely well. Additionally, we are excited by what we see as stronger than expected performance of our cranes, roadbuilding and utilities businesses, driven by a combination of the impact of price realization, improving internal efficiencies and increasing external demand. Our Construction businesses had disappointing results in the quarter, due to reduction in demand for the scrap handling product, as well as shortfalls in product throughput in certain other businesses. However, while not apparent in this quarter, these businesses are improving, with a strong order book, and an exciting product launch for many next generation pieces of equipment scheduled for the remainder of the year."
