The Connecticut-based company said the loss was extreme compared to the profit of $163.3 million reported in the first quarter of 2008.Net sales tumbled 45% to $1.30 billion, as declining demand for aerial work platforms, construction and materials processing continued to hurt the company. Net sales of aerial work platforms fell 66%, while construction and cranes posted declines of 48% and 29% respectively.“The construction segment generated a large operating loss during the first quarter as restructuring activities resulted in substantial changes,” chief operating officer and acting interim president for Terex Construction Tom Riordan said.“A minimum of $100 million of costs are targeted to be taken out of the construction business on an annual basis.” Net sales in the materials processing and mining business fell 34% on the back of weak demand for processing equipment.However, the mining side benefitted from a favourable product mix orientated towards larger trucks, as well as price increase for shovels and trucks.Riordan said the demand for mining equipment in the quarter was being driven by strength in thermal coal and gold, although second quarter orders were showing signs of slowing demand, particularly for trucks and drills.The company also accepted after-tax charges of $30 million associated with restructuring programs and a continued reduction in production levels.”The turmoil from the global credit crisis and economic slowdown has quickly and deeply impacted sales for our industry, with certain sectors down almost 75 per cent from year ago levels,” chief executive officer Ron DeFeo said. “In response we are aggressively reducing costs, with manufacturing spending in the first quarter of 2009 down 39 per cent from the peak spending level in the second quarter of 2008.”He added Terex expected to cut spending by $300 million per quarter by end of year and will begin operating on a build to order basis.Terex has been slashing jobs and inventories since June 2008, but the size of the demand shift caught the company off guard. Terex also lowered its outlook for full-year sales and said a decline of 40-45% was expected compared to 2008. Previously, the company had said those sales were expected to decline in the range of 30-35%.“We remain confident in the long-term outlook for our business as we concentrate on managing through these immediate challenges,” DeFeo said.
