Terex Corp (TEX, Financial) released its Q3 2023 earnings report on October 26, 2023. The company reported a 15% increase in sales to $1.3 billion and a 46% improvement in EPS to $1.75 over the prior year. The company's operating profit margin improved by 190 basis points to 12.7% year-over-year. Terex Corp (TEX) has also raised its full-year 2023 EPS outlook to approximately $7.05.
Operational and Financial Highlights
Terex Corp (TEX, Financial) reported net sales of $1.3 billion, a 15.1% increase from $1.1 billion in Q3 2022. The increase was primarily driven by healthy demand for products across multiple businesses and price realization necessary to mitigate rising costs. Income from operations improved from $120.8 million to $163.2 million, or 12.7% of net sales. The year-over-year increase of $42.4 million was primarily due to incremental profit achieved on higher sales volume and improved manufacturing efficiencies, partially offset by cost increases.
Business Segment Review
The Materials Processing segment reported net sales of $541.1 million, up 18.2% year-over-year, primarily driven by strong demand for products across multiple businesses. The Aerial Work Platforms segment reported net sales of $751.0 million, up 13.3% year-over-year, primarily driven by higher demand and improvements in the Genie supply chain.
Strong Balance Sheet and Liquidity
As of September 30, 2023, the company had liquidity of $846 million and net leverage of 0.5x. For the year-to-date period, Terex deployed $55 million for capital expenditures and investments, net of proceeds from the sale of capital assets. During the year-to-date period, Terex has returned $66 million to shareholders through share repurchases and dividends.
2023 Outlook
Terex Corp (TEX, Financial) has updated its 2023 outlook, projecting net sales of approximately $5,150 million, an operating margin of around 13.0%, and an EPS of approximately $7.05.
CEO and CFO Commentary
Terex Chairman and CEO, John L. Garrison, Jr., commented on the results, stating,
We demonstrated strong execution in the third quarter and delivered a 15% increase in sales and a 46% improvement in EPS over the prior year. As a result of continued strong performance, we are raising our full-year 2023 EPS outlook to ~$7.05. We remain confident in our ability to execute on our strategy to deliver long-term shareholder value."
Julie Beck, Senior Vice President and Chief Financial Officer, added,
We have delivered a strong year to date performance with 23% growth in sales, 90% improvement in earnings per share and a $205 million increase in free cash flow over the prior year. Our continued solid performance, coupled with a strong balance sheet, low leverage, and increasing free cash flow, provide flexibility to support our growth initiatives."
Explore the complete 8-K earnings release (here) from Terex Corp for further details.
