01.11.2016

More positive quarter for JLG

JLG has reported its year results, with a much better quarter, but ends 11 percent down for the full year.

Full year revenues – to the end of September – were $3.01 billion, 11 percent down on last year, with aerial lift sales 5.5 percent lower at $1.54 billion, telehandlers sales a full 34 percent lower at $774 million and other revenues such as parts and service etc… up 3.5 percent at $669 million. The order book at the end of September was around 14 percent lower at $179.3 million. Operating income fell just over 35 percent to $263.4 million, partly due to fourth quarter write downs and restructuring costs.

Looking at the fourth quarter revenues improved slightly, rising almost a percentage point to $775.8 million, thanks to a 10 percent jump in sales of aerial lifts to $411 million, offset by a 23 percent fall in telehandlers sales to $180.8 million. Other revenue improved by 15 percent to 184 million. Operating profit however dropped 20 percent to $45.2 million after $26.9 million of write downs and charges, including workforce reductions and restructuring of its parts logistics operations in North America and Europe. Without this operating profits would have been up around 58 percent compared to the last quarter of fiscal 2015. The increase is primarily a result of lower spending on engine emissions standards changes, favourable material costs and lower provisions for valuation reserves on used equipment.

Oshkosh as a whole reported full year revenues of $6.28 billion- up three percent on the year, with pre-tax profits of $307 million, almost six percent lower than last year.

Oshkosh chief executive Wilson Jones said: “We finished the year on a high note with fiscal fourth quarter earnings exceeding both our most recent estimates for the quarter and our results from the fourth quarter of fiscal 2015. Higher than expected sales in the access equipment segment as well as lower bid & proposal costs and favourable warranty and benefits costs in the defence segment drove the higher than expected results for the quarter.”

“Our access equipment team delivered on the commitment to balance production as inventory was reduced to targeted levels at fiscal year end helping to drive strong free cash flow of $490 million during the year.”

“It’s clear that customers with exposure to construction markets are maintaining their cautious approach to capital expenditures, but our defence and fire & emergency segments help provide a solid outlook for fiscal 2017. In addition we continue to work on simplifying our businesses by focusing on those activities that drive the most value for both customers and shareholders. I am confident in our team’s ability to navigate through challenging market conditions in some of our businesses and position Oshkosh to take advantage of future opportunities.”

Vertikal Comment

This is a far better quarterly result than expected, particularly in underlying operating profits. However ending the year and the quarter with such a slim order book/backlog, does not bode particularly well for the start of the new fiscal year. Much will depend on what happens with the telehandler business which has slumped badly after a mini boom driven by emission regulation changes. This will of course eventually right itself.

In the meantime the aerial lift business looks better, but the lack of a decent order book will be largely due to fewer orders for booms and scissors. If the election results are seen by business as positive, we could easily see a strong bounce back as we head into the new calendar year. It be too late though to have much of an impact on the current quarter.