27.01.2021

JLG recovery picks up

JLG has posted its first quarter results for the three months to the end of December with revenues just 21.5 percent below the same period in 2019.

Total revenues were $563.7 million made up of three business areas:
- New aerial work platform sales were $278 million, just nine percent below what it was the year before.
- Telehandler sales however were 39 percent lower at $122.9 million. To put this in some context, this time last year aerial lift sales were nine percent lower than in the same quarter of 2018, while telehandler sales had dipped 25 percent.
- Other revenues - parts, services and used equipment etc... - were $162.8 million, 22.5 percent lower than a year ago. Operating profit dipped almost 64 percent to $24.9 million compared to last year when it had improved four percent.

The backlog/order book at the end of December was $771.5 million, 23.7 percent below where it was a year earlier, and that was down 39 percent on calendar year end 2018.

The company says that it expects a return to revenue growth in North America in the second half and that negotiations with rental companies are going well at the same time as their fleets are aging, all of which bodes well. It expects to be back at full production by the end of the second quarter.

Parent company Oshkosh fared better with revenues down just 6.5 percent to $1.58 billion, with a pre-tax profit of $83 million just over 14 percent below last year’s level, thanks to its strong defence business as well as a buoyant Fire & Emergency operation.

Oshkosh chief executive Wilson Jones said: “While the timing of recovery in our Access Equipment segment remains difficult to predict, we are confident in the strength and resilience of our businesses as we continue to adapt and pivot during the pandemic. Although we are not providing quantitative expectations with today’s announcement, we are seeing improvement in our end markets and believe that we are well positioned to grow revenues in the back half of fiscal 2021 and retain a positive long-term outlook."

The decrease in sales was due to lower market demand resulting from the economic downturn as a result of Covid-19. The decrease in operating income was primarily due to the impact of lower sales volume, adverse absorption as a result of lower production, unfavourable price/cost dynamics and charges related to restructuring actions of $8 million, offset in part by lower spending as a result of the Covid-19 pandemic, lower intangible asset amortization and favourable product mix. Excluding $8 million of pre-tax charges related to restructuring actions, adjusted operating income in the first quarter of fiscal 2021 was $32.9 million, or 5.8 percent of sales.

Vertikal Comment

This is a most encouraging report, coming during a pretty grim month for many businesses. It also sounds as though major rental companies are quietly more optimistic than they expected to be if you look at their third quarter statements.

JLG is the third or fourth manufacturer that we have spoken to that is quietly expecting a relatively strong second to third quarter pick up. It is certainly looking a great deal more positive for manufacturers that it was just five to six months ago. At least one company is expecting demand to outstrip current capacity for a while, which might even have a positive impact on pricing – positive from the manufacturer’s viewpoint of course.

A good start to the results season.