Core Viewpoint - Amphenol Corporation announced its acquisition of Trexon for approximately $1 billion in cash, aiming to expand its military-focused product portfolio in response to increasing defense spending [1][2] Group 1: Acquisition Details - The acquisition of Trexon, which specializes in connectivity products such as wires, cables, and connectors, is expected to complement Amphenol's existing offerings in the defense market [1] - Trexon is projected to generate sales of approximately $290 million in 2025, with an EBITDA margin of 26% [1] Group 2: Financial Impact - Amphenol anticipates that the acquisition will enhance its earnings per share in the first year following the completion of the transaction, which is expected to close in the fourth quarter of this year [2] - The company's stock price has increased by over 57% year-to-date, reflecting positive market sentiment [1]

Core Insights - Terex Corporation has completed a re-pricing of its term loan, which is expected to reduce cash interest costs by approximately $3 million annually [1] - The new term loan rate is set at S+175bps, improving by 25bps from the previous rate [2] Company Overview - Terex Corporation is a global industrial equipment manufacturer specializing in materials processing machinery, waste and recycling solutions, mobile elevating work platforms (MEWPs), and equipment for the electric utility industry [2] - The company designs, builds, and supports products used across various sectors including maintenance, manufacturing, energy, minerals and materials management, construction, waste and recycling, and the entertainment industry [2] - Terex provides lifecycle support through a global parts and services organization and offers digital solutions to maximize customer investment returns [2] - The company focuses on environmentally friendly products, including electric and hybrid offerings that provide quiet and emission-free performance, as well as products that support renewable energy and aid in waste recovery [2] - Terex products are manufactured in North America, Europe, and Asia Pacific, and are sold worldwide [2]

Core Viewpoint - The analyst previously held a sell rating for Terex Corp. (NYSE: TEX) due to strong macro pressures and concerns that the stock's valuation did not adequately reflect the associated risks [1] Group 1: Investment Philosophy - The investment approach is fundamentally driven, focusing on identifying businesses with potential for scaling and unlocking significant terminal value [1] - Key factors considered include competitive moat, unit economics, reinvestment runway, and management quality, which are essential for long-term free cash flow generation and shareholder value creation [1] - The analyst emphasizes the importance of focusing on sectors with strong secular tailwinds for investment opportunities [1] Group 2: Professional Background - The analyst has 10 years of experience in investment banking and is currently managing personal funds sourced from friends and family [1] - The motivation for writing on Seeking Alpha is to share investment insights and receive feedback from fellow investors [1] - The aim is to help readers concentrate on the elements that drive long-term equity value [1]

Core Insights - Terex reported Q2 2025 earnings with EPS of $1.49, exceeding analyst estimates of $1.40 by 6.4% and revenue of $1.50 billion, surpassing the consensus estimate of $1.44 billion with a year-over-year growth of 7.6% [1][2] - The Environmental Solutions segment showed strong performance, while Aerials and Materials Processing faced notable declines [1][4] Financial Performance - EPS (Non-GAAP) for Q2 2025 was $1.49, down 31.0% from $2.16 in Q2 2024 [2] - Revenue (GAAP) reached $1.50 billion, an 8.0% increase from $1.38 billion in Q2 2024 [2] - Operating margin (Non-GAAP) decreased to 11.0%, down 3.1 percentage points from 14.1% in the previous year [2] - Net income (Non-GAAP) was $98 million, a decline of 32.9% from $146 million in Q2 2024 [2] - Free cash flow (Non-GAAP) improved to $78 million, an increase of 81.4% from $43 million in Q2 2024 [2] Segment Performance - The Environmental Solutions segment saw net sales increase by 12.9% on a pro forma basis, driven by higher throughput of refuse collection vehicles and utility equipment installations [5] - Aerials segment net sales dropped 17.1%, with operating profit cut by more than half due to reduced capital spending by rental customers and tariff pressures [6] - Materials Processing segment experienced a 9.0% decline in GAAP sales, although bookings increased by 24% year-over-year, indicating some positive trends [7][8] Business Strategy and Innovation - Terex is focusing on business transformation by expanding into steady-growth sectors like waste and recycling through its Environmental Solutions segment [4] - The company is integrating its 3rd Eye digital platform into its products, enhancing safety and generating subscription-based revenue [9] - New electric and hybrid offerings are being developed to meet sustainability demands and regulatory standards [9] Financial Management and Guidance - Free cash flow (non-GAAP) improved significantly, with liquidity maintained at $1.2 billion and $75 million returned to shareholders through dividends and share repurchases [10] - Management reaffirmed FY2025 guidance, targeting revenue between $5.3 billion and $5.5 billion and adjusted EPS of $4.70 to $5.10 [11] - Net free cash flow for FY2025 is expected to reach $300–$350 million, supported by disciplined capital spending and contributions from ESG [12]

Investment Rating - The industry investment rating is "Positive" and maintained [10] Core Viewpoints - The overseas aerial work platform industry continues to show positive growth, with equipment rental income maintaining year-on-year growth in Q2 2025. The largest rental company, United Rentals, expects capital expenditure to remain at historical highs for the entire year of 2025 [2][6] - Leading manufacturers have seen an increase in new orders year-on-year in Q2 2025, with JLG's new orders returning to historical median levels, indicating stabilization in order volumes [2][8] Summary by Sections Overseas Rental Companies - United Rentals reported Q2 2025 equipment rental income of $3.415 billion, a year-on-year increase of 6.2%. The capital expenditure for Q2 2025 was $1.460 billion, up 7.7% year-on-year, with a total expected capital expenditure for 2025 projected to be between $3.65 billion and $3.95 billion, reflecting a slight year-on-year increase of 1.2% [6][19][25] - Sunbelt's Q1 2025 revenue was $2.308 billion, down 3.7% year-on-year, with capital expenditure of $1.808 billion, a decrease of 47% year-on-year. The company has increased its rental outlets in the U.S. [7][31][33] Overseas Equipment Manufacturers - Terex, under the Genie brand, reported Q2 2025 revenue of $607 million, down 17.1% year-on-year, but new orders increased by 70% year-on-year to $310 million. The backlog of orders was $714 million, down 36% year-on-year [8][41] - Oshkosh, which owns the JLG brand, reported Q2 2025 revenue of $638 million, a decline of 5.6% year-on-year, while new orders increased by 45% year-on-year to $640 million. The backlog of orders was $1.189 billion, down 64% year-on-year [8][48]

[PART I FINANCIAL INFORMATION](index=5&type=section&id=PART%20I%20FINANCIAL%20INFORMATION) [Item 1 Financial Statements](index=5&type=section&id=Item%201%20Financial%20Statements) The financial statements for the period ended June 30, 2025, reflect increased net sales but decreased net income and EPS year-over-year, with total assets and liabilities rising due to operations and the ESG acquisition Condensed Consolidated Statement of Comprehensive Income (Loss) Highlights | Metric | Q2 2025 (M) | Q2 2024 (M) | YoY Change | H1 2025 (M) | H1 2024 (M) | YoY Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | **Net Sales** | $1,487 | $1,382 | +7.6% | $2,716 | $2,674 | +1.6% | | **Gross Profit** | $291 | $329 | -11.6% | $521 | $626 | -16.8% | | **Operating Profit** | $129 | $193 | -33.2% | $198 | $351 | -43.6% | | **Net Income (Loss)** | $72 | $141 | -48.9% | $93 | $249 | -62.7% | | **Diluted EPS** | $1.09 | $2.08 | -47.6% | $1.40 | $3.68 | -62.0% | Condensed Consolidated Balance Sheet Highlights | Metric | June 30, 2025 (M) | Dec 31, 2024 (M) | Change | | :--- | :--- | :--- | :--- | | **Total Current Assets** | $2,684 | $2,320 | +$364 | | **Total Assets** | $6,152 | $5,730 | +$422 | | **Total Current Liabilities** | $1,293 | $1,073 | +$220 | | **Long-term Debt** | $2,583 | $2,580 | +$3 | | **Total Liabilities** | $4,187 | $3,898 | +$289 | | **Total Stockholders' Equity** | $1,965 | $1,832 | +$133 | Condensed Consolidated Statement of Cash Flows Highlights (Six Months Ended June 30) | Metric | 2025 (M) | 2024 (M) | Change | | :--- | :--- | :--- | :--- | | **Net cash provided by operating activities** | $81 | $33 | +$48 | | **Net cash used in investing activities** | ($38) | ($52) | +$14 | | **Net cash used in financing activities** | ($84) | ($23) | -$61 | | **Net (Decrease) in Cash** | ($14) | ($52) | +$38 | [Note B – Business Segment Information](index=11&type=section&id=Note%20B%20%E2%80%93%20BUSINESS%20SEGMENT%20INFORMATION) Effective January 1, 2025, Terex realigned its segments, with the ES segment showing substantial growth from the ESG acquisition, offsetting sales declines in Aerials and MP segments - Effective January 1, 2025, the company realigned its business into **three reportable segments**: (i) **Aerials**, (ii) **Materials Processing ("MP")**, and (iii) **Environmental Solutions ("ES")**[38](index=38&type=chunk) Net Sales by Segment (in millions) | Segment | Q2 2025 | Q2 2024 | YoY Change | H1 2025 | H1 2024 | YoY Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | **Aerials** | $607 | $732 | -17.1% | $1,057 | $1,355 | -22.0% | | **MP** | $454 | $499 | -9.0% | $836 | $1,019 | -18.0% | | **ES** | $430 | $152 | +182.9% | $829 | $303 | +173.6% | Operating Profit by Segment (in millions) | Segment | Q2 2025 | Q2 2024 | YoY Change | H1 2025 | H1 2024 | YoY Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | **Aerials** | $46 | $115 | -60.0% | $49 | $207 | -76.3% | | **MP** | $49 | $77 | -36.4% | $85 | $149 | -43.0% | | **ES** | $61 | $19 | +221.1% | $117 | $34 | +244.1% | [Note D – Acquisitions](index=18&type=section&id=Note%20D%20%E2%80%93%20ACQUISITIONS) On October 8, 2024, Terex acquired Environmental Solutions Group (ESG) for **$2,010 million** in cash, financed by senior notes and a new term loan, with **$797 million** allocated to goodwill and **$1,114 million** to identifiable intangible assets - The company acquired Environmental Solutions Group (ESG) from Dover Corporation on October 8, 2024, for a cash purchase price of **$2,010 million**[54](index=54&type=chunk) Preliminary Fair Value of ESG Net Assets Acquired (in millions) | Assets/Liabilities | Fair Value | | :--- | :--- | | **Total assets acquired** | $2,253 | | Goodwill | $797 | | Identified intangibles subject to amortization | $1,114 | | **Total liabilities assumed** | $253 | | **Net assets acquired** | $2,000 | - Goodwill of **$797 million**, assigned to the ES segment, consists of intangible assets that do not qualify for separate recognition, such as assembled workforce and expected synergies[60](index=60&type=chunk) [Note J – Long-Term Obligations](index=25&type=section&id=Note%20J%20%E2%80%93%20LONG-TERM%20OBLIGATIONS) To finance the ESG acquisition, Terex increased its revolving credit facility to **$800 million** and added a **$1,250 million** term loan, also issuing **$750 million** in senior notes, with total long-term debt at **$2,583 million** as of June 30, 2025 - On October 8, 2024, the company amended its credit agreement, increasing the revolving credit facility to **$800 million** (expiring 2029) and adding a new **$1,250 million** term loan facility (maturing 2031)[81](index=81&type=chunk) - On October 8, 2024, the company issued **$750 million** of 6.25% Senior Notes due 2032 to help fund the ESG acquisition[87](index=87&type=chunk) Fair Value of Debt as of June 30, 2025 (in millions) | Debt Instrument | Book Value | Fair Value | | :--- | :--- | :--- | | 5% Notes | $600 | $583 | | 6.25% Notes | $750 | $750 | | New Term Facility (net of discount) | $1,241 | $1,247 | [Note L – Stockholders’ Equity](index=28&type=section&id=Note%20L%20%E2%80%93%20STOCKHOLDERS%E2%80%99%20EQUITY) In the first half of 2025, Terex repurchased **1,360,706** shares for **$53 million** and declared **$0.17** per share dividends, with an additional **$150 million** authorized for future repurchases Share Repurchases (Six Months Ended June 30) | Year | Total Shares Repurchased | Amount (in millions) | | :--- | :--- | :--- | | **2025** | 1,360,706 | $53 | | **2024** | 345,274 | $20 | - The Board declared dividends of **$0.17 per share** for Q1 and Q2 2025. A further dividend of **$0.17 per share** was declared in July 2025[103](index=103&type=chunk) - In July 2025, the Board authorized an additional repurchase of up to **$150 million** of the Company's outstanding shares of common stock[103](index=103&type=chunk) [Item 2 Management's Discussion and Analysis of Financial Condition and Results of Operations](index=30&type=section&id=Item%202%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management reported Q2 2025 net sales growth of **8%** to **$1.5 billion** driven by the ESG acquisition, offsetting legacy sales decline, while operating margin decreased to **8.7%** due to lower volumes and unfavorable mix, with the full-year outlook maintained - Q2 2025 net sales grew **8%** year-over-year to **$1.5 billion**, while legacy sales (excluding ESG) declined by **12%**[117](index=117&type=chunk) - Operating margin for Q2 2025 was **8.7%**, a decrease of **530 basis points** year-over-year, consistent with planned sequential improvement[117](index=117&type=chunk) - The company maintained its full-year 2025 outlook, expecting net sales of **$5.3 to $5.5 billion** and earnings per share between **$4.70 and $5.10**[125](index=125&type=chunk) - The acquisition of ESG has significantly expanded exposure to the waste and recycling end market, which now represents approximately **30%** of global revenue[116](index=116&type=chunk) [Results of Operations](index=35&type=section&id=RESULTS%20OF%20OPERATIONS) Q2 2025 consolidated net sales increased **7.6%** to **$1.487 billion** due to the ESG acquisition, offsetting declines in Aerials and MP segments, while gross profit fell **11.6%** and ES segment sales surged **182.9%** Q2 2025 vs Q2 2024 Segment Performance (in millions) | Segment | Net Sales 2025 | Net Sales 2024 | % Change | Operating Profit 2025 | Operating Profit 2024 | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | **Aerials** | $607 | $732 | (17.1)% | $46 | $115 | (60.0)% | | **Materials Processing** | $454 | $499 | (9.0)% | $49 | $77 | (36.4)% | | **Environmental Solutions** | $430 | $152 | 182.9% | $61 | $19 | 221.1% | - Aerials' performance was impacted by lower end-market demand, unfavorable mix, and tariffs, as sales to independent rental customers declined more than sales to national customers[138](index=138&type=chunk)[139](index=139&type=chunk) - The Environmental Solutions segment's strong growth was primarily due to sales from the newly acquired ESG business and strong performance in Terex Utilities[142](index=142&type=chunk) [Liquidity and Capital Resources](index=40&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) As of June 30, 2025, Terex had total liquidity of approximately **$1.174 billion**, with **$81 million** cash provided by operations and **$23 million** in free cash flow for H1 2025, and no significant debt maturities until 2029 - Total liquidity was approximately **$1.174 billion** at June 30, 2025, with no significant debt maturities until 2029[166](index=166&type=chunk)[167](index=167&type=chunk) Free Cash Flow (in millions) | Metric | H1 2025 | | :--- | :--- | | Net cash provided by operating activities | $81 | | Capital expenditures, net | ($58) | | **Free cash flow** | **$23** | - Working capital as a percentage of trailing three-month annualized net sales was **22.8%** at June 30, 2025[172](index=172&type=chunk) [Item 3 Quantitative and Qualitative Disclosures About Market Risk](index=44&type=section&id=Item%203%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Terex is exposed to market risks from foreign exchange rates, interest rates, and commodity prices, with a **10%** change in FX rates impacting H1 2025 operating income by approximately **$10 million**, and **48%** of debt at floating rates as of June 30, 2025 - A **10%** strengthening or weakening of the U.S. dollar would have had an approximate **$10 million** impact on operating income for the six months ended June 30, 2025[189](index=189&type=chunk) - As of June 30, 2025, **48%** of the company's debt was floating rate, with a total weighted average interest rate of **5.59%**[190](index=190&type=chunk) - The company faces risks from inflationary pressure on components and increased tariffs on steel and other foreign goods, which it actively mitigates through global sourcing and other strategies[194](index=194&type=chunk) [Item 4 Controls and Procedures](index=45&type=section&id=Item%204%20Controls%20and%20Procedures) As of June 30, 2025, the company's CEO and CFO concluded that disclosure controls and procedures were effective, with no material changes to internal control over financial reporting during the quarter - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of June 30, 2025[195](index=195&type=chunk) - No material changes to the internal control over financial reporting occurred during the quarter ended June 30, 2025[196](index=196&type=chunk) [PART II OTHER INFORMATION](index=46&type=section&id=PART%20II%20OTHER%20INFORMATION) [Item 1 Legal Proceedings](index=46&type=section&id=Item%201%20Legal%20Proceedings) The company is involved in various legal proceedings arising from normal business operations, with management believing the outcomes will not materially affect consolidated financial statements - Terex is involved in various legal proceedings, including product liability, commercial, and intellectual property litigation, which have arisen in the normal course of operations[199](index=199&type=chunk) [Item 1A Risk Factors](index=46&type=section&id=Item%201A%20Risk%20Factors) The company updated its risk factors, highlighting potential material adverse effects from increased international tariffs, sensitivity to general economic conditions, and challenges of operating a multinational business - Rising international tariffs on goods from China and other regions could materially increase costs and adversely affect business results if they cannot be recovered from customers or mitigated through sourcing strategies[202](index=202&type=chunk)[203](index=203&type=chunk) - Demand for products is sensitive to economic cycles, interest rates, and government spending. Geopolitical instability, inflation, and high interest rates have increased economic uncertainty[204](index=204&type=chunk) - Operating a multinational business exposes the company to risks including political instability, currency controls, changes in tax laws, and trade protection measures[207](index=207&type=chunk)[210](index=210&type=chunk) [Item 2 Unregistered Sales of Equity Securities and Use of Proceeds](index=48&type=section&id=Item%202%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During Q2 2025, Terex repurchased **652,984** shares at an average price of **$35.59** per share, with approximately **$33 million** remaining available for repurchase under authorized plans Issuer Purchases of Equity Securities (Q2 2025) | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | **April 2025** | 622,100 | $35.07 | | **May 2025** | 26,280 | $46.03 | | **June 2025** | 4,604 | $45.85 | | **Total** | **652,984** | **$35.59** | - As of the end of Q2 2025, approximately **$33 million** remained available for share repurchases under the authorized programs[214](index=214&type=chunk)

Core Insights - Terex (TEX) reported revenue of $1.49 billion for the quarter ended June 2025, marking a year-over-year increase of 7.6% [1] - The earnings per share (EPS) for the same period was $1.49, down from $2.16 a year ago [1] - The reported revenue exceeded the Zacks Consensus Estimate of $1.45 billion, resulting in a surprise of +2.23% [1] - The company also delivered an EPS surprise of +3.47%, with the consensus EPS estimate being $1.44 [1] Financial Performance Metrics - Net sales for ESG were $430 million, surpassing the average estimate of $407.79 million based on five analysts [4] - Net sales for Aerial Work Platforms (AWP) were $607 million, below the average estimate of $624.11 million, representing a year-over-year decline of -31.2% [4] - Net sales for Materials Processing & Mining (MP) were $454 million, exceeding the average estimate of $428.9 million, with a year-over-year change of -9% [4] - Net sales for Corporate and Other / Eliminations were -$4 million, compared to the average estimate of -$0.71 million, reflecting a year-over-year change of -407.7% [4] - Income from Operations for AWP was $46 million, below the average estimate of $64.71 million [4] - Income from Operations for ESG was $61 million, compared to the average estimate of $68.19 million [4] - Income from Operations for Corporate and Other / Eliminations was -$27 million, compared to the average estimate of -$19.51 million [4] - Income from Operations for MP was $49 million, versus the average estimate of $51.86 million [4] Stock Performance - Terex shares returned -0.3% over the past month, while the Zacks S&P 500 composite increased by +2.7% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Financial Data and Key Metrics Changes - The company reported earnings per share (EPS) of $1.49 on sales of $1.5 billion, with an operating margin of 11% [6][23] - Free cash flow reached $78 million, a significant increase compared to the previous year, representing a cash conversion of 108% [7][26] - The effective tax rate for the second quarter was 18.3%, about 170 basis points better than planned [25] Business Line Data and Key Metrics Changes - Aerials segment sales were $607 million, with an operating margin improvement of 500 basis points sequentially, but about 200 basis points lower than expected due to customer mix [26][27] - Materials Processing (MP) sales were $434 million, 9% lower than last year, with an operating margin of 12.7%, showing a sequential improvement from 10% in Q1 [27][29] - Environmental Solutions (ES) generated $430 million in sales, with a 12.9% year-over-year growth and a 19.1% operating margin, reflecting strong operational execution [30] Market Data and Key Metrics Changes - Waste and recycling now represents approximately 30% of global revenue, characterized by low cyclicality and steady growth [16] - The company noted a two-speed profile in U.S. construction, with strength in large projects and infrastructure, while local private projects remain soft [17] - European markets are experiencing a weak economic environment in the near term, but there are encouraging signs for infrastructure and industrial spending growth in the medium to long term [17] Company Strategy and Development Direction - The company is focused on leveraging synergies across its portfolio, particularly following the ESG acquisition, and is ahead of initial synergy targets [19][21] - The company plans to maintain its full-year EPS outlook of $4.7 to $5.1, expecting stronger performance in Environmental Solutions in the second half [7][35] - The company is also looking to invest in organic growth while returning capital to shareholders, with a new $150 million share buyback program announced [32] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges posed by high interest rates and tariff-related uncertainties impacting capital decisions [15] - The company expects to see a significant increase in free cash flow compared to 2024, anticipating between $300 million and $350 million in 2025 [35] - Management expressed confidence in the company's ability to navigate the current dynamic environment and deliver long-term value to shareholders [38] Other Important Information - The company is experiencing direct and indirect tariff-related inflation on materials, estimating a net impact of approximately €0.50 for the full year [13] - The company has a strong liquidity position with $1.2 billion available, and plans to deleverage in the second half of the year [31] Q&A Session Summary Question: What is driving the strong ES margins? - Management attributed the strong ES margins to operational efficiencies, improved execution in utilities, and favorable customer and product mix [42][43] Question: What drove the $20 million adjustment in EBITDA guidance? - The adjustment was driven by stronger outlook in ES, offset by unfavorable mix in Aerials and higher tariffs [50][51] Question: How do you view the margin outlook for Aerials in the second half? - Margins are expected to decline in the second half due to tariffs, lower sequential volume, and unfavorable customer mix [58] Question: What is the outlook for replacement demand? - Normal discussions on replacement demand are ongoing, with some signs of fleets aging in certain segments [71] Question: How are tariffs impacting the cost profile? - The company does not expect material impact from steel inflation due to hedging and local sourcing [108] Question: What is the outlook for digital revenue streams? - The company is expanding its Third Eye technology and exploring additional digital revenue opportunities [121]

Financial Data and Key Metrics Changes - The company reported earnings per share (EPS) of $1.49 on sales of $1.5 billion, with an operating margin of 11% [5][20] - Free cash flow reached $78 million, a significant increase from the previous year, representing a cash conversion of 108% [6][23] - The effective tax rate for the quarter was 18.3%, about 170 basis points better than planned due to favorable discrete items [21][22] - EBITDA was $182 million, up 12.2% of sales [22] Business Line Data and Key Metrics Changes - Aerials segment sales were $607 million, with an operating margin improvement of 500 basis points sequentially, but about 200 basis points lower than expected due to customer mix [23][24] - Materials Processing (MP) sales were $434 million, down 9% year-over-year, with an operating margin of 12.7%, showing a sequential improvement from 10% in Q1 [24][25] - Environmental Solutions (ES) generated $430 million in sales, with a 12.9% year-over-year growth and a 19.1% operating margin, reflecting strong performance [26] Market Data and Key Metrics Changes - Waste and recycling now represents approximately 30% of global revenue, characterized by low cyclicality and steady growth [14] - Utilities account for about 10% of revenue, with growth driven by the need to expand the power grid [14] - General construction has decreased to less than one-third of total markets, with strength in large projects and infrastructure, while local private projects remain soft [15] Company Strategy and Development Direction - The company is focused on leveraging synergies across its portfolio, particularly following the ESG acquisition, and is ahead of initial synergy targets [16][19] - The company plans to maintain its full-year EPS outlook of $4.7 to $5.1, expecting stronger performance in Environmental Solutions in the second half [6][30] - The company is exploring digital revenue streams, particularly through the Third Eye platform, which enhances operational efficiency and safety [17][120] Management's Comments on Operating Environment and Future Outlook - Management noted that macroeconomic factors, including high interest rates and tariff-related uncertainties, continue to impact capital decisions [13][15] - The company expects a significant increase in free cash flow compared to 2024, anticipating between $300 million and $350 million in 2025 [31] - Management expressed confidence in the resilience of its diversified end markets, particularly in waste and recycling, utilities, and infrastructure [14][15] Other Important Information - The company ended the second quarter with $1.2 billion in liquidity and plans to deleverage in the second half of the year [27] - A new $150 million share buyback program was authorized, with $33 million remaining from the previous authorization [28] Q&A Session Summary Question: What is driving the strong ES margins? - Management attributed the strong ES margins to operational efficiencies, better execution in utilities, and favorable customer and product mix, although the favorable mix is not expected to recur in the second half [39][40][42] Question: What drove the $20 million adjustment in EBITDA guidance? - The adjustment was driven by stronger performance in ES, offset by unfavorable mix in Aerials and higher tariffs [47][49] Question: How do you view the margin outlook for Aerials? - Management expects Aerials' operating margin to be mid-single digits in Q3, driven by tariffs and unfavorable customer mix [55][56] Question: What is the impact of tariffs on the cost profile? - The company does not expect material impact from steel inflation due to hedging and local sourcing, but tariffs are included in the $0.50 guidance for the year [106][108] Question: How is the company addressing customer caution in the market? - Management noted that larger customers are maintaining their cadence for negotiations, while smaller customers remain cautious due to economic uncertainty [64][94]

Company Performance - Terex reported quarterly earnings of $1.49 per share, exceeding the Zacks Consensus Estimate of $1.44 per share, but down from $2.16 per share a year ago, representing an earnings surprise of +3.47% [1] - The company posted revenues of $1.49 billion for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 2.23% and up from $1.38 billion year-over-year [2] - Over the last four quarters, Terex has consistently surpassed consensus EPS estimates and revenue estimates [2] Future Outlook - The sustainability of Terex's stock price movement will depend on management's commentary during the earnings call and future earnings expectations [3][4] - The current consensus EPS estimate for the upcoming quarter is $1.43 on revenues of $1.4 billion, and for the current fiscal year, it is $4.72 on revenues of $5.37 billion [7] - The estimate revisions trend for Terex was mixed ahead of the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [6] Industry Context - The Manufacturing - Construction and Mining industry, to which Terex belongs, is currently in the top 39% of over 250 Zacks industries, suggesting a favorable outlook compared to the bottom 50% [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact Terex's performance [5]