Terex’s first quarter results were shaped by a notable decline in sales, primarily attributed to production cuts in its Aerials and Materials Processing segments aimed at rebalancing inventory with demand. Despite these headwinds, management emphasized the strength of its Environmental Solutions business, which now accounts for roughly one third of company sales and delivered robust operating margins. CEO Simon Meester highlighted that much of the near-term margin pressure was the result of deliberate actions to manage supply, and that these impacts are largely behind the company as it enters the second quarter.
Is now the time to buy TEX? Find out in our full research report (it’s free).
Terex (TEX) Q1 CY2025 Highlights:
- Revenue: $1.23 billion vs analyst estimates of $1.25 billion (4.9% year-on-year decline, 1.3% miss)
- EPS (GAAP): $0.31 vs analyst expectations of $0.44 (28.8% miss)
- Adjusted EBITDA: $128 million vs analyst estimates of $110.4 million (10.4% margin, 15.9% beat)
- The company reconfirmed its revenue guidance for the full year of $5.4 billion at the midpoint
- EPS (GAAP) guidance for the full year is $4.90 at the midpoint, beating analyst estimates by 15.8%
- EBITDA guidance for the full year is $660 million at the midpoint, above analyst estimates of $628.7 million
- Operating Margin: 5.6%, down from 12.2% in the same quarter last year
- Organic Revenue fell 13% year on year (4.4% in the same quarter last year)
- Market Capitalization: $3.02 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions Terex’s Q1 Earnings Call
- Jerry Revich (Goldman Sachs) asked about Environmental Solutions’ margin sustainability, to which CFO Jennifer Kong explained that Q1 margins were boosted by record throughput and some one-off items, with margins expected to moderate but remain strong.
- Jamie Cook (Truist Securities) questioned the impact of tariffs and whether Terex’s U.S. manufacturing footprint offers a competitive edge. CEO Simon Meester noted that domestic production in key segments positions the company well to mitigate tariffs relative to certain competitors.
- David Raso (Evercore ISI) inquired about the sequential margin recovery in Aerials and the expected volume ramp. Management detailed that margin recovery would be driven by increased production volumes and reduced under-absorption from prior cuts.
- Mig Dobre (Baird) sought clarification on the impact of U.K. tariffs and price adjustments in Materials Processing. Meester responded that the company is prioritizing supply chain mitigation and would only implement price surcharges if necessary.
- Tami Zakaria (JPMorgan) asked about the tariff assumptions baked into guidance, particularly regarding China. Meester clarified that the outlook assumes a significant but partial reduction in China tariffs within the next couple of months.
Catalysts in Upcoming Quarters
In upcoming quarters, our team will be monitoring (1) the pace of margin recovery in Aerials and Materials Processing as production normalizes, (2) the realization of ESG acquisition synergies and backlog conversion in Environmental Solutions, and (3) ongoing developments in global tariff policy and their impact on sourcing and pricing strategies. Execution on these fronts will be central to supporting the company’s full-year outlook.
Terex currently trades at $47.69, up from $36.35 just before the earnings. Is the company at an inflection point that warrants a buy or sell? The answer lies in our full research report (it’s free).
High-Quality Stocks for All Market Conditions
The market surged in 2024 and reached record highs after Donald Trump’s presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025.
While the crowd speculates what might happen next, we’re homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver’s seat and build a durable portfolio by checking out our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.
