Net sales for Terex Cranes segment for the third quarter of 2008 increased 36.2% over the third quarter of 2007, to US$717.4 million.
Excluding the translation effect of foreign currency exchange rate changes, net sales increased by about 26%.
"Demand remains strong for larger capacity cranes, particularly larger capacity lattice boom crawler cranes, tower cranes and rough terrain cranes, driven by global infrastructure and energy projects. The market in North America continues to remain strong for large capacity cranes, but sales of smaller capacity cranes, including boom trucks and lower capacity truck cranes, remain soft," said the company.
The cranes segment operating margin increased to 12.3% during the third quarter of 2008, up from 12% for the previous year. Operating results for the third quarter of 2008 include a charge for a crane repair programme of $15 million.
Excluding this charge, operating margin would have been 14.4%, with the year-on-year increase, primarily driven by higher volume and favorable sales mix, explained Terex.
Global demand continued to be orientated towards higher margin, larger capacity cranes. Supplier constraints in Europe for components, for example, hydraulics and gearboxes, have improved, as have welding and assembly capacity constraints, added Terex.
"Demand is expected to remain strong for the foreseeable future for larger capacity cranes but, due to the uncertain outlook for the global economy, capacity expansion plans are being carefully reviewed."
Elsewhere in the group, the worsening economic situation has resulted in the aerial work platform division cutting around 18% of its 5,000 worldwide workforce over the final three months of the year. The division saw sales fall by 9% in the three months to 30 September.
"The current environment is challenging, marked by a continued global credit crisis and worsening economic conditions, particularly in the US and Western Europe...At this time, our price increases have not yet fully offset our total material cost increases. We are taking aggressive actions to better position the company for the expected reduced net sales levels of the next twelve months, in particular in the AWP, construction, and materials processing businesses," commented Ron DeFeo, Terex CEO and chairman.