Terex's Q2 2025 Earnings Call: Navigating Contradictions in Tariff Strategies and ESG Margins

Tariff mitigation strategies and impact, expected margin moderation in ES, tariff mitigation and impact on EBITDA guidance, ESG margins and synergies, ESG margin performance and sustainability are the key contradictions discussed in Terex's latest 2025Q2 earnings call.



Sales and Earnings Performance:
- Terex Corporation reported sales of $1.5 billion and earnings per share of $1.49 for Q2 2025, with an operating margin of 11%.
- The performance was in line with expectations, supported by strong Environmental Solutions segment and sequential growth in Materials Processing, despite challenges in the Aerials segment.

Environmental Solutions Performance:
- Environmental Solutions posted sales of $430 million with 12.9% year-over-year growth, achieving a 19.1% operating margin.
- The segment's growth was driven by improved delivery and customer mix in refuse collection vehicles and utilities trucks, reflecting operational efficiencies and favorable product mix.

Tariff Impact and Mitigation:
- Terex expects a net tariff impact of roughly $0.50 for the full year, driven by tariffs on steel, EU reciprocal tariffs, and the 232 steel tariff doubling.
- Mitigation strategies include pulling material forward, working with suppliers, and exploring alternative supply solutions, with pricing as a last resort.

Material Processing Improvement:
- Material Processing sales were $454 million, a 9% decrease from the previous year, but with a 12.7% operating margin.
- Sequential improvement was achieved through cost controls, pricing actions, and high fleet utilization rates, although challenges remain in the cranes and handling businesses.