Fourth Quarter, End of Year Reports Show Economic Improvements
February 14, 2005—Most of the fourth quarter and full year earnings reports for lifting equipment manufacturers and rental companies are in, and while many of the services and equipment they provide don't compare on a jobsite, their reports provide a similar outcome: a strong increase in sales and earnings for 2004 and a positive outlook for 2005.
The Manitowoc Co., Manitowoc, Wis., reported a 45 percent increase in crane sales, from $247.7 million in the fourth quarter of 2003 to $358.4 million in 2004. Operating earnings were $15.9 million, up substantially from $5.5 million in the fourth quarter of 2003. As of December 31, total crane backlog was $327 million, up from $221 million in 2003. The company as a whole reported a 38 percent increase for the quarter that ended December 31, 2004, from $389 million during the same period in 2003 to $535 million. For the full-year 2004, net sales increased 25 percent to $1.96 billion, from $1.57 billion in 2003. Net earnings for the year were $39.1 million compared with earnings of $3.5 million for 2003.
Manitowoc's Chairman and Chief Executive Officer Terry Growcock said 2004 was an excellent year for Manitowoc, despite a $13 million increase in raw materials prices. “Our crane segment posted year-over-year improvement in sales, earnings, and margins due to our globalization efforts, as well as our cost reduction initiatives and price increases to offset rising steel prices,” Growcock said. “Worldwide demand remains strong for our tower cranes, mobile telescopic cranes, and boom trucks, and our crawler cranes are doing well outside of North America.”
In 2005, Growcock said the company expects an increased worldwide demand for its crane products. “We're continuing to watch the North American crawler crane market, which is showing some encouraging signs, as well as steel and commodity prices, which are stabilizing in certain markets,” he said.
Caterpillar, Inc., Peoria, Ill, reported record 2004 sales and revenues of $30.25 billion and a record profit of $2.03 billion, up 85 percent from a year ago. The company also reported a record fourth quarter with sales and revenues of $8.57 billion and profit of $551 million, up 58 percent from the fourth quarter in 2003. The increase in sales and revenues was driven by $6.26 billion increase in machinery and engines sales, a $515 million favorable impact of the strengthening euro and British pound, $512 million of increased price realization, and $200 million of higher financial products revenues.
In 2005, Caterpillar expects solid growth with sales and revenues up 12 to 15 percent. It also expects material cost pressures to continue for the first half of the year, with some relief in the last six months, which should result in a stronger second half of 2005.
Ingersoll-Rand Co., Hamilton, Bermuda, announced its earnings and revenues increased in the fourth quarter of 2004 compared to the fourth quarter in 2003. The company reported net earnings of $515.2 million for the fourth quarter of 2004, compared to $197.4 million in the fourth quarter of 2003. Fourth-quarter earnings for 2004 included $222.3 million from continuing operations, as well as $292.9 million from discontinued operations. Revenues increased by more than 9 percent to $2.5 billion, compared to revenues of $2.24 billion for the 2003 fourth quarter. Full-year 2004 net revenues were $9.39 billion, a 14 percent increase over to net revenues of $8.25 billion in 2003. In 2005, when the company celebrates the 100th anniversary of the merger that formed Ingersoll-Rand, it expects a revenue growth of 6 to 8 percent.
Atlas Copco, parent company of Rental Service Corp., Scottsdale, Ariz., reported increased revenues and strong order growth in Q4. For the rental sector, the slight market recovery supported a 14 percent rise in rental revenue, which consisted of an 8 percent increase in rental rates and increased volume of 6 percent. Sales of used equipment, representing 15 percent of total revenues, increased 33 percent. Sales of merchandise, spare parts, and new equipment, accounting for the remaining 9 percent of total revenues were down 23 percent in USD, mainly due to the divestment of the noncore IAT distributor business in Texas.
Although Terex Corp., Westport, Conn., has not released its fourth quarter 2004 or yearly earnings, its management team estimates its 2005 revenues will be in the range of $5.4 billion to $5.6 billion. “Many of our businesses are experiencing increased demand, and we expect that demand to continue in 2005,” Chairman and Chief Executive Officer Ron DeFeo said. “But as I have also previously stated, the challenges of supplier issues, particularly steel pricing, continue to have an effect on our business.” Between increased prices and better purchasing, DeFeo said the company anticipates that 2005 will be a more normal year where volume leverage can be turned into margin improvements.
JLG Industries, McConnellsburg, Pa., will release its fiscal 2005 second quarter financial results after market close on February 24, and United Rentals, Greenwich, Conn., will hold its quarterly conference call to discuss its fourth quarter and full year 2004 results on March 14.
