November 3, 2004 • Lifting equipment manufacturers across the globe are reporting their financial findings for the third quarter of 2004, and one common thread among these companies' financial announcements is North American sales are improving. Caterpillar, Gehl, Haulotte, Ingersoll-Rand, Manitowoc, and Terex have all revealed their quarterly results, and increased revenues have been reported for each company. Lifting equipment rental companies, including RSC and United Rentals, also are reporting continued growth in North America.
For Atlas Copco, parent company of RSC, Scottsdale, Ariz., the operating margin in the rental business reached an all-time high of 19.2 percent. “Rental Service showed an impressive performance with very high efficiency levels and substantial price increases,” said Gunnar Brock, president and chief executive officer of Atlas Copco. Rental revenues increased 11 percent, which consisted of an increase in rental rates of 7 percent and increased volume of 4 percent. Sales of used equipment increased 20 percent, while new equipment, merchandise, and spare parts sales were down 4 percent. Fleet utilization averaged 70 percent, which is the highest ever reported in a single quarter.
Despite a recent SEC investigation of accounting records and a lawsuit filed against the company by its investors, United Rentals, Greenwich, Conn., has reported a revenue increase of 5.5 percent, from $805.1 million in the third quarter of 2003 to $849.7 million. Revenues for the general rentals segment of the company, which represents 91 percent of the total revenues in the third quarter 2004, increased 10.7 percent to $771.5 million from third quarter 2003. Rental rates also increased 8.5 percent, and same-store rental revenues increased 12 percent. However, the traffic control segment of United Rentals declined $30.1 million from the third quarter of 2003, and same-store rental revenues declined 29.5 percent.
Ingersoll-Rand Co., Hamilton, Bermuda, announced its revenues increased by 15 percent to $2.368 billion, compared to the third quarter of 2003. The company's infrastructure segment, which includes Bobcat compact equipment and Ingersoll-Rand construction equipment, increased its revenues by approximately 32 percent to $811.5 million compared to $614.7 million in the third quarter of last year.
Confirming its place in the world is Pinguely-Haulotte, L'Horme, France, which has reported its profits are up 26 percent for the first nine months of the year and 51 percent compared to the third quarter in 2003. With these increases, the company expects to reach its net profitability of 5 percent for 2004.
Caterpillar, Inc., Peoria, Ill., reported its profits were up an astonishing 124 percent and sales and revenues were up 38 percent. With sales and revenues of $7.65 billion for the third quarter and $21.68 billion in first nine months of 2004, the company reported sales were the best they've been in the history of the company. “We are encouraged by the improved operating profit generated from each of our major lines of business this quarter,” said Chairman and Chief Executive Officer Jim Owens. “Machinery profit was up 78 percent, engines were up 96 percent, and financial products were up 40 percent.”
Construction equipment manufacturer Gehl Co., West Bend, Wis., reported record third quarter net sales of $87.5 million, an increase of 45 percent from third quarter 2003, Construction equipment net sales in the third quarter of 2004 were $58.8 million, a 52 percent increase from this time last year. Telescopic handler shipments more than doubled as the demand from rental companies continued in the quarter. Gehl Europe also posted strong sales during the quarter.
Manitowoc Co., Manitowoc, Wis., reported solid growth in third quarter sales and earnings, which includes growth in the crane segment. Net sales for the company increased 21 percent to $491 million, from $407 million during the same period last year. In the crane division, net sales increased 24 percent to $306 million for the quarter, up from $248 million in the third quarter of 2003. While steel and commodity prices continue to have a negative impact on operating earnings, the strong earnings continue to reflect on the global strength of tower and mobile cranes. As of Sept. 30, total crane backlog was $289 million, up from $150 million last year.
Finally, Terex Corp., Westport, Conn., announced its sales increased to $1.252 billion, which is up 38 percent over the third quarter of 2003. Meanwhile, shares fell as much as 18 percent as news of an internal accounting probe became public. The approximately $11 million net imbalance are related to overstated goodwill, working capital, and warranty issues adjustments in the acquistions of Schaeff and O&K Mining.
Net income from the quarter was $33 million compared to $16.5 million this time last year. Ron Defeo, the company's chairman and chief executive officer, noted supplier issues continue to negatively impact the business. For example, steel prices have negatively affected operating costs by $31 million in the third quarter, which equals 2.5 percent. “We are behind the curve in certain businesses from a pricing perspective, but we have aggressive plans to catch up,” DeFeo said. “We are expecting to see the impact of some already announced increases in the near term, and between increased prices and better purchasing, we expect 2005 will be a more normal year where volume leverage can be turned into margin improvements.”
