01.08.2007

Strong quarter for JLG

JLG, now the Access equipment segment of Oshkosh, has reported third quarter revenues of $873.8 million, in comparison with JLG’s results for the same period last year, this represents a 31 percent increase.

However if you strip out Gradall excavator sales from the 2006 numbers, (no longer a part of JLG) a like for like comparison shows an increase of 38 percent.

Oshkosh has published ‘nine month’ results for the business of $1.7 billion, compared to $1.6 billion at the same point in 2006. However the numbers that Oshkosh has published are almost certainly for the seven months that Oshkosh has owned the business making any comparison meaningless.

Operating income for the quarter $98.3 million, or 11.3 percent of sales, this is distorted though by accounting charges relating to the acquisition.

JLG’s order book at the end of June was $1.19- 28 percent up on this time last year and representing over four months production.

Oshkosh says that the increased sales reflect higher worldwide demand for aerial work platforms and the addition of the sales of Caterpillar branded telehandlers, offset in part by lower demand for traditional telehandlers in North America.

JLG added 35 cents to Oshkosh’s earnings per share compared it its original estimate for the quarter of 20 to 25 cents per share.

Robert G. Bohn, chairman, president and chief executive officer of Oshkosh said, "The team at JLG really delivered this quarter as they continue to integrate into the Oshkosh Truck family. Global demand for aerial work platforms has been outstanding and we believe these conditions will continue in fiscal 2008, particularly in our overseas markets."

Oshkosh

Oshkosh as a whole saw its revenues, operating income and every measure above the interest line in its accounts, more than double thanks to the addition of JLG along with double digit growth in its defense segment.

In spite of a substantial increase in interest costs associated with the purchase of JLG, net income before tax was still up by over 66 percent for the quarter.

Based on these latest results Oshkosh is forecasting revenues of over $7 billion for its 2008 fiscal year.

Vertikal Comment

The JLG acquisition is looking good for Oshkosh, in spite of a softening North American market, particularly for telehandlers. The Cat telehandler alliance also looks as though it is yielding positive bottom line results for the company.

Given that Caterpillar consistently lost money on its telehandler line, producing them with a decent margin was always a risk for JLG.

At this stage of the game it looks as though JLG will settle nicely into the Oshkosh camp and be a positive move for investors, JLG customers and employees alike.