Terex (TEX) Q2 2024 earnings summary

Executive summary

• Q2 2024 net sales were $1.4 billion, with adjusted EPS of $2.16 and operating income of $193 million (14% margin), driven by strong North American AWP demand offsetting European softness.

• Return on invested capital reached 25.9%, reflecting strong capital efficiency.

• Backlog remains robust at $2.4 billion, about 2x historical average, though down year-over-year.

• Announced $2 billion acquisition of Environmental Solutions Group (ESG), the largest in company history, expected to close in H2 2024 and reduce cyclicality.

• Free cash flow for Q2 was $42 million, with liquidity of $879 million as of June 30, 2024.

Financial highlights

• Q2 2024 net sales declined 1.5% year-over-year to $1.38 billion; gross profit margin was 23.8%.

• Operating income was $193.1 million, down from $209.9 million in Q2 2023; adjusted EPS was $2.16, GAAP EPS $2.08.

• Free cash flow for Q2 was $42.4 million; full-year guidance is $325–$375 million.

• Effective tax rate for Q2 was 19.2%, up from 16.7% last year.

• EBITDA for the last twelve months was $689.7 million.

Outlook and guidance

• Full-year 2024 adjusted EPS outlook is $7.15–$7.45, with net sales guidance of $5.1–$5.3 billion.

• Operating margin expected between 12.9% and 13.4%, above 2023 levels.

• Free cash flow guidance for 2024 is $325–$375 million; CapEx planned at $145 million.

• Segment guidance: MP sales $1.95–$2.05 billion (15.1%–15.4% margin); AWP sales $3.15–$3.25 billion (13.7%–15.2% margin).

• Outlook excludes impact of ESG acquisition and other unusual items.