Lower than expected capital expenditure from customers has resulted in a 17% drop in net sales for Genie in the second quarter of the year.
Sales at Terex Corp’s Aerials division stood at $607 million, representing a $125 million fall year-over-year as rental customers focused primarily on replaceing their fleets.
Genie’s GTH-1044
The lower than expected revenue in aerials for the quarter compares to a 7.6% rise in group sales for the quarter, amounting to $1.5 billion.
Simon Meester, Terex President and Chief Executive Officer, said, “Our overall financial performance demonstrates the power of the evolving Terex portfolio. Our Environmental Solutions (ES) segment exceeded our outlook for the second quarter with strong sales and margin performance in Environmental Solutions Group (ESG) and Terex Utilities, more than offsetting industry-wide headwinds in Aerials where independent rental customers deployed less capex than anticipated.
“Materials Processing (MP) achieved sequential growth and margin improvement in line with our expectations,” said Meester. “The addition of ESG and on-going implementation of our strategy will continue to make Terex a more resilient and predictable performer, well positioned to navigate through this dynamic environment.”
Operating profit for aerials in the quarter saw a significant drop from from $115 million in the second quarter of last year to $46 million this year. “The change was primarily due to lower sales volume, unfavourable mix and tariffs,” said the company, “Partially offset by cost reduction actions. Sales to independent rental customers were down proportionately more than sales to national rental customers.”
On the subject of tariffs, Kong-Picarello, Senior Vice President and Chief Financial Officer, added, “As a global company with a significant footprint in the United States and around the world, we have optionality to adapt to various tariff scenarios. That said, significant tariff rate increases could have a transitory impact on operating margins until mitigation actions are fully deployed. Assuming that tariffs broadly remain at current rates, we maintain our full year EPS outlook of $4.70 to $5.10.”
Despite pricing pressures and market softness, Terex expects a rebound for access in Q2