Terex Shares Surge 15.7% Following Third-Quarter Earnings Beat and Strong Sales Growth

Terex Corporation shares gained 15.7% since its third-quarter 2026 earnings release on Oct. 28, supported by better-than-expected earnings and revenues, robust order growth and encouraging full-year guidance. TEX reported adjusted earnings of $1.50 per share, beating the Zacks Consensus Estimate of $1.42 by 5.6%. Earnings were flat year over year.

Revenues surged 58.4% year over year to $2.20 billion, surpassing the consensus estimate of $2.17 billion by 1.4%. Pro forma revenues grew 11.6%, driven by higher shipments across Materials Processing, Specialty Vehicles and Aerials. Terex reported bookings of $2.3 billion, reflecting a 52.7% year-over-year increase on a pro forma basis. The book-to-bill ratio was 103%, indicating that incoming orders exceeded quarterly sales. Backlog rose 12.9% year over year to $7 billion on a pro forma basis. All four operating segments recorded increased bookings, providing improved revenue visibility. Management highlighted solid order activity and progress in integrating the expanded business.

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Aerials revenues surged 32% to $709 million, driven by strong demand from national customers and increased capital spending on large projects. Adjusted EBITDA rose to $62 million from $56 million. However, adjusted EBITDA margin contracted to 8.7% from 10.5% due to unfavorable customer mix, inflation and tariff-related pressures. Terex continues to advance the proposed separation of Aerials, engaging with multiple strategic counterparties. Specialty Vehicles generated revenues of $657 million, up 8.1% year over year on a pro forma basis, supported by increased fire apparatus and recreational vehicle shipments. Materials Processing revenues increased 4.1% year over year to $434 million. Environmental Solutions revenues declined 8% year over year to $400 million, primarily due to lower refuse collection vehicle shipments, partly offset by higher utilities product sales.

The cost of goods sold rose 61.9% year over year to $1.76 billion. Gross profit increased 45.5% to $435 million, while gross margin contracted to 19.8% from 21.6%. Selling, general and administrative expenses increased 40.1% to $199 million. Operating profit rose 30.7% to $183 million, although operating margin declined to 8.3% from 10.1%. Adjusted EBITDA increased 13.9% year over year on a pro forma basis to $286 million.

Operating cash flow increased to $241 million in the third quarter from $154 million a year ago. Free cash flow rose 60.8% to $209 million, supported by improved working capital efficiency. Terex ended the third quarter of 2026 with cash and cash equivalents of $407 million and total liquidity of $1.2 billion. The company reduced debt by $113 million during the quarter. Terex returned $91 million to shareholders through dividends and repurchases. Its board authorized an additional $500 million share repurchase program, bringing total available authorization to $611 million.

Terex expects 2026 revenues of $8-$8.2 billion, representing approximately 8.5% pro forma growth at the midpoint. Adjusted EBITDA is projected at $930-$960 million, implying approximately 10% pro forma growth and an 11.7% margin at the midpoint. Management expects adjusted earnings of $4.80-$5 per share and free cash flow of $360-$400 million. The outlook incorporates approximately $28 million in realized synergies during 2026. Terex remains on track to achieve $75 million in annualized synergies within two years, supported by integration initiatives and improved operating execution. Terex's shares have gained 22.5% over the past year compared with the industry's 0.7% growth.

Caterpillar Inc. CAT reported adjusted earnings of $7.20 per share for the third quarter of 2026, up 45.5% year over year. Caterpillar's sales and revenues increased 17.3% to $20.68 billion, surpassing the consensus estimate of $20.58 billion by 0.48%. Caterpillar's order backlog surged 95.7% year over year to a record $78.1 billion, reflecting strong order rates. Komatsu KMTUY reported an 8% year-over-year improvement in earnings per share to 68 cents in the September-ended quarter. Revenues were reported at $7 billion compared with $6.66 billion in the year-ago quarter. Astec Industries ASTE is expected to release its third-quarter 2026 results on Nov. 5, 2026. Engineered components manufacturer for critical industries ITT Inc. (NYSE: ITT) reported revenue ahead of Wall Street’s expectations in Q3 2026, with revenue up 44.2% year on year to $1.44 billion.