Just as technology conglomerate 3M (NYSE: MMM ) is ditching the famed "Six Sigma" from its R&D process, a Connecticut manufacturing company wants you to know 3M has no monopoly on numerical corporate catch phrases.
Though more of a sales target than a management ethos, Terex (NYSE: TEX ) is keen to achieve "12 by 12 in 10." The company is targeting $12 billion in revenue with an operating margin of at least 12% by 2010. To track its progress, let's take a look at recently reported second-quarter results.
Terex crushed average analyst expectations by 17%, with earnings per diluted share rising 40% from the prior year to $2.32. Thanks to considerable strength from the company's cranes and materials processing and mining segments, net sales rose to $2.9 billion. Terex is projecting 2008 net sales of $10.5 billion to $10.9 billion. The operating margin rose 50 basis points to $12.6%.
Mirroring observations by competitor Caterpillar (NYSE: CAT ) , Terex pointed to slowing growth from Western Europe as a drag on sales of aerial work platforms and construction equipment. However, according to Terex Chairman and CEO Ron Defeo: "We expect strong infrastructure and commodity demand trends for our Cranes and MPM segments to continue, which will drive a higher portion of our net sales and income for the balance of 2008."
Terex still enjoys a monstrous sales backlog for the next 12 months of $4.22 billion, well above the $2.4 billion reported by Joy Global (NYSE: JOYG ) and $2.2 billion by Bucyrus (Nasdaq: BUCY ) . Terex is holding a further $484 million in forward sales off the backlog tally until exact pricing is established. Backlogs provide tangible corroboration for investors who wish to know the substance behind internal projections.
Terex recently sold the world's largest mobile hydraulic excavator to a Canadian client for use in the oil sands. No matter the buyer, whether a major player like Canadian Natural Resources (NYSE: CNQ ) or Suncor Energy (NYSE: SU ) , the price tag must have been pretty hefty.
Thanks to the global commodity boom, I expect Terex to reach its revenue and margin goals one giant excavator at a time. The "12 by 12 by 10" looks well within reach to this Fool.