Shares of Terex (TEX) plummeted 6.57% in pre-market trading on Thursday following a series of significant announcements that have left investors reassessing the company's future. The equipment manufacturer revealed plans for a strategic merger, released its third-quarter financial results, and announced its intention to exit its Aerials segment, all contributing to the sharp decline in stock price.
Terex reported Q3 sales of $1.4 billion, a 14.4% year-over-year increase but slightly below analyst expectations of $1.41 billion. Despite the miss on revenue, the company's adjusted earnings per share of $1.50 exceeded estimates. Terex maintained its full-year adjusted EPS guidance of $4.70 to $5.10, demonstrating confidence in its overall performance despite facing challenges from increased tariff-related costs.
In a move that caught many by surprise, Terex announced a strategic merger with specialty vehicle company REV Group in a stock-and-cash transaction. The deal, which values the combined entity at approximately $9 billion, will see Terex shareholders owning about 58% of the merged company. Simultaneously, Terex revealed plans to exit its Aerials segment, considering options such as a sale or spinoff of the unit. These strategic shifts, combined with the slight earnings miss and warnings of higher tariff-related costs in Q4, appear to have unsettled investors, leading to the significant pre-market decline in Terex's stock price.
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