28.07.2016

Better quarter for JLG

JLG has published its third quarter results with an improvement over the slow first half as revenues edged up.

Total revenues for the first nine months were $2.23 billion, a drop of 15 percent on the same period last year. Aerial lift sales held up slightly better at $1.13 billion, a decline of 7.5 percent, telehandler sales for the nine months are down 33 percent to $515 million due entirely to a very slow start to the year. Other revenues, which include parts and service etc… were almost six percent higher at $515 million. Operating profits for the nine months were $218.2 million almost 38 percent lower than last year.

Looking at the third quarter, total revenues increased two percent to $952.5 million, made up of $511.4 million of aerial lift sales, down just over five percent on last year and $266.6 million of telehandlers more than 20 percent higher than this time last year, while other revenues improved almost four percent to $174.5 million. Operating profit for the quarter slipped just over 10 percent to $122.1 million.

The order book/backlog at the end of June was $374.6 just over five percent lower than this time last year. However it is almost half what it was at the start of the quarter and only represents around a month’s worth of business.

JLG is part of the Oshkosh group, which posted total revenues for the nine months of $4.52 billion roughly the same as last year, pre-tax profits however were 17 percent lower at $223.8 million.

Chief executive Wilson Jones said: “Our solid fiscal third quarter results were led by strong performance in our defence and fire & emergency segments, each of which recorded year-over-year increases in sales, operating income and operating income margin. Our People First culture, the further enhancement and execution of our MOVE strategy and our innovative products contribute to Oshkosh being a different integrated global industrial, enabling us to deliver solid performance in a variety of economic conditions.”

“The fiscal third quarter was highlighted by progress on many fronts, most notably in our defence segment as we prepare to ramp up production and deliver our revolutionary new Joint Light Tactical Vehicle (JLTV). We also made progress this quarter on a large order we received in our second fiscal quarter for an international defence customer that is purchasing more than 1,000 of our Mine Resistant Ambush Protected - All Terrain Vehicles (M-ATV).”

“Our access equipment segment continues to manage production levels while delivering high quality aerial products in a market that we expect to be down compared with fiscal 2015. The team made great progress this quarter lowering inventory as we work to optimise our working capital.“

Vertikal Comment

JLG, as with the other major North American manufacturers is struggling with a flat home market as the major rental companies hold down capital expenditure, while also having to deal with a stronger dollar.

Having said this the business is still doing relatively well and signs in the third quarter are more positive. The fourth quarter is likely to be much of the same however, leaving the full year results well below last year’s levels.

While there is plenty of growth left in the powered access market, one cannot help wonder if we are not also seeing the larger producers lose some market share, as smaller manufacturers - some with more specialised products - take a larger slice of the market? Skyjack, Niftylift and more recently Snorkel have all grown substantially in the past year or two and have increasingly strong positions in the market, particularly among the small to medium sized rental companies, whose spending is holding up better than majors such as United Rentals.

If the rental market fragments again, as it does tend to do from time to time, might we see that carry over to the aerial lift manufacturers this time?
Time will tell.