The US construction equipment giant announced income from continuing operations for the third quarter of 2011 of $36.9m, compared to a loss from continuing operations of $90.9m in the third quarter of 2010.
Net sales for the construction segment for the third quarter of 2011 increased 39%, to $395.4m, year on year, driven by strong demand for backhoe loaders in Russia, compact equipment in central Europe and trucks in developing markets including Russia and South Africa. Demand for material handlers continued to increase especially in central Europe, the segment’s largest market for this type of machinery.
Slow demand for roadbuilding products in North America continued due to weak highway infrastructure spending. The tightening in government sponsored financing programs continued to constrain roadbuilding demand in Brazil. As a result, the segment has taken steps to adjust production levels.
The construction segment made an operating loss of $6.4m (1.6% of net sales), compared to a loss of $7.7m (2.7% of net sales) for the third quarter of 2010. Operating results were negatively impacted by lower demand for roadbuilding products, costs associated with restructuring actions and a higher mix of lower margin compact products. Supplier constraints continued to impact results in the third quarter. Higher input costs continued to impact some of the business lines within the segment, particularly the supply of truck tyres, which has continued to be an issue.
Net sales for the Aerial Work Platforms segment (Genie) for the third quarter of 2011 increased 59%, to $448.7m. The Materials Processing segment saw net sales rise 19% to $171.1m.
Net sales for the Cranes segment for the third quarter of 2011 increased 47% year on year to $543.6m. Almost every crane category experienced increased sales over the same quarter last year, with straddle carriers, rough terrain cranes and boom trucks the largest contributors to the sales growth this quarter. Sales in the USA more than doubled and stronger demand also occurred in China, India and Germany.
For cranes, income from operations in the third quarter of 2011 was $25.9m (4.8% of net sales), up from $3.9m (1.1% of net sales) for the third quarter of 2010.
Chairman and CEO Ron DeFeo said: “Overall, our performance continues to improve in terms of net sales and operating profitability, even during this economically uncertain time.”
He added: “Our longer term outlook is for continued growth in many of our key product categories and end markets. While we are mindful of the continuing economic uncertainty, we continue to believe that the overall market conditions support growth led by our Aerial Work Platforms business, mainly in North America, and our Port Equipment business globally. We will continue to be focused on margin expansion and continued cash generation. As a result of price increases which we will be instituting, as well as cost saving initiatives across our businesses, we anticipate increases in profitability to outpace our growth in net sales. We are currently in the budget and strategy review process for our 2012 fiscal year, and will provide more detail on our 2012 expectations after we complete that process.”