Farm and construction machinery stocks are experiencing selling pressure Thursday morning. The sector is being dragged into the red after Terex Corp. (TEX) lowered its 2008 earnings outlook.
Shares of Terex are posting one of the biggest losses in the sector, down about 17%. Meanwhile, NACCO Industries Inc. (NC) and Art's S-Way Manufacturing Co. Inc. (ARTW) shares also posting significant losses of about 6%.
Around 11:10 am Eastern Time, Terex stock was down $8.59 to $38.73 a share, while NACCO shares were down $6.94 to $111.90 and shares of Art's S-Way were down 77 cents to $12.02.
Other stocks experiencing notable selloffs include CNH Global NV (CNH), Caterpillar Inc. (CAT), AGCO Corp. (AG), Manitowoc Company Inc. (MTW) and Deere & Co. (DE).
Before the opening bell on Thursday, Terex cut its earnings forecast for fiscal 2008 due to soft market conditions and rising input costs in its aerial work platforms and construction segments in Western Europe and the United States. The company also provided guidance for the third and fourth quarters of fiscal 2008.
Currently, the company expects full-year 2008 earnings per share to be between $6.35 and $6.65, compared with its prior guidance range of $6.85 to $7.15 per share. On average, 14 analysts polled by First Call/Thomson Financial expect the company to earn $7.08 per share for the year.
Terex now expects net sales for 2008 to be in the range of $10.2 to $10.6 billion, compared with its prior forecast range of $10.5 to $10.9 billion. Analysts have a consensus sales estimate of $10.61 billion for fiscal 2008.
For the third quarter, Terex said earnings are expected to be between $1.26 and $1.38 per share, and between $1.20 and $1.33 per share for the fourth quarter. Wall Street expects the company to earn $1.57 per share for the third quarter and $1.60 per share for the fourth quarter.
Earlier this week, Deere announced that it would be closing its Welland, Ontario, Canada plant by the end of 2009 and plans on transferring the workload to plants in Wisconsin and Mexico.
The decision will affect about 800 workers employed at the Ontario plant.
The action came as a result of the company taking after-tax charges of approximately $90 million, about half of which will be recorded in the fourth quarter of 2008. The amount was not reflected in the firm's earnings outlook for the quarter of $425 million issued in August.
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