Outgoing Emeco chief executive Laurie Freedman has insisted the earthmoving company he is leaving behind is in "terrific shape", despite it cutting its earnings forecast last month for the second time this financial year.

Mr Freedman told The West Australian he wanted to spend more time with his family and that his resignation had nothing to do with Emeco's performance in recent times.

"I think the company is in terrific shape," he said.

"We are generating significant amounts of cash and we are reducing debt and making the ship ready for some inevitable recovery in due course.

"As far as I'm concerned there is probably never a good time for a chief executive to leave and I've written to all of our people this morning explaining in detail how good a shape the company and the reasons underlying, so, they are the only people I am interested in giving an in depth insight and they will make up their own judgement.

"I think we are in good shape."

Mr Freedman said the company wanted to build its international businesses to a similar extent it had in Australia, which would take five to 10 years.

Last month, Emeco cut its earnings forecast for the second time this financial year, citing worse than expected conditions in Queensland's coking coal industry as well as weakness in Europe and Canada.

Mr Freedman said at the time that fleet utilisation had weakened further than expected since Emeco's interim results in March, forcing it to cut its forecast a second time to between $56 million and $60 million.

Since its $1 billion float in 2006, at a $1.90 issue price, Emeco shares have plunged as low as 16¢ in January this year.

They have recovered some ground since, but were down 2.5¢, or 5.88 per cent, to 40¢ at 11am on the back of today's announcement.

Emeco said it had begun the search for a new chief executive, but Mr Freedman would remain in the role until his successor started with the company.

Mr Freedman will continue to hold a 3 per cent stake in the company.

LOUISE BURKE and STUART McKINNON