Terex Corporation Ltd (TEX) Set To Break-even Next Year

Terex Corporation Ltd (NYSE: TEX), a $5.9bn mining company, though is expected to report a negative EPS for FY2009, will break-even by next year, according to the management.

The company has seen its margins coming under severe pressure in the current downturn in the past few quarters with the FY2009 EPS expected to be -$1.95, according to Barclays Capital (NYSE: BCS). The management sees a margin potential in the coming cycle around 2 points higher than the prior one as a result of a traction with the operational initiatives such as lean Terex Business System and strategic sourcing and permanent cost reductions undertaken during this downturn. The company further expects to generate approximately $140mn as operating profit from its Dortmund mining facility in Germany.

Barclays Capital expects the company to report EPS of $0.19 in H1FY10 as against an expected EPS of -$1.13 in H1FY09. Additionally, the London based investment bank expects the company to scout for acquisitions in as early as the second half of the FY2010.