25.01.2013

JLG almost quadruples profits

JLG has reported its first quarter results with profits almost four times those of last year. As a result of this and strong group profits, Oshkosh has upped its full year forecasts.

JLG revenues – excluding inter-company sales to Oshkosh - were up more than 15 percent to $581.2 million, although sales of aerial lifts remained static at $252.2 million. Telehandler sales however jumped over 39 percent to $206.9 million, other revenues - including parts and service improved almost 18 percent to $122.1 million.

Inter-company sales to Oshkosh as part of its military contracts have now ended. Last year JLG invoiced Oshkosh $122.6 million.

Operating profits increased by a factor of over 3.7 to $48.9 million, from $13.1 million last year, driven largely by benefits from previous price increases flowing through and the absence of inter-company business.

JLG's backlog as of the end of December was $767.1 million, just over two percent down on this time last year.

Oshkosh as a whole saw revenues dip slightly to €1.76 billion, six percent lower than a year ago, however pre-tax profits jumped over 33 percent to $66.9 million.

Oshkosh chief executive Charlie Szews said: “We started the year strong with results that exceeded our expectations as we continued to execute our MOVE strategy. MOVE provides a clear roadmap and targets for delivering shareholder value, and the Oshkosh team is working diligently to deliver against that roadmap.”

“Each of our non-defence segments improved its operating income margins compared to the prior year quarter, favourably positioning our company to deliver on our long-range goals. Our strong first quarter performance and other positive developments, give us confidence to raise our full-year outlook for adjusted diluted earnings per share to a range of $2.80 to $3.05.”

Vertikal Comment

This is an interesting set of numbers from JLG, it is no surprise that the aerial lift sales have stabilised for the moment, although we would expect them to pick up again over the next quarter or two.

The scale of the margin improvement is surprising, although price increases were expected to start kicking in we would not have expected them to have had quite this impact.

Telehandlers tend to generate lower margins than lifts, so we have to think that the improvement is also down to product mix within the aerial lift sales and the very respectable boost in ‘other’ revenues, which most likely includes high margin parts sales.

No matter which way you cut it this is a good start to the year for JLG and encouraging news for the industry as a whole.