27.01.2015

JLG up 7% on strong telehandler sales

JLG has reported a solid first quarter in terms of revenues, thanks to strong sales of telehandlers in North America, which outsold aerial lifts for the first time.

Total revenues for the quarter were $716.7 million, an increase of almost 7.5 percent with aerial lift sales falling 12.5 percent to $277.3 million. This was largely due to lower sales in South America – a good deal of it likely to have been in Brazil which has been very good for JLG in recent years. Sales in the rest of the world remained buoyant.

Telehandler sales jumped over 33 percent to $290.4 million, thanks to shipments ahead of price increases related to the new Tier 4 engine changes. Other revenues including product support etc… increased 11 percent to $149 million.

Operating income fell 14.5 percent due to an adverse product mix - aerial lifts carry better margins than telehandlers - higher new product development spending and increased operating costs related to the company’s MOVE initiatives. The results from the first quarter last year were also boosted by an extra $7.5 million related to reaching an agreement on the final pricing of a multi-year U.S. military contract.

The company’s backlog at the end of December increased 69 percent to $7993.3 million. Oshkosh as a whole saw revenues fall 11.6 percent to $1.35 billion, while pre-tax profits dropped over 36 percent to $79.1 million.

Oshkosh chief executive Charles Szews said: “We are pleased to announce first quarter adjusted results that exceeded our expectations, driven by better than expected results in each of our four segments. We continued to experience, as expected, significantly lower defence segment sales in the quarter due to lower defence department spending for tactical wheeled vehicles. However, we finished the quarter with strong orders and higher backlogs in all of our non-defence segments.”

“Our outlook for Oshkosh remains positive as we continue executing our MOVE strategy, which we believe provides realistic targets and process discipline for our company to achieve our strategic goals. As a result of our positive outlook and stronger than expected first quarter performance, we are maintaining our full year 2015 adjusted earnings per share estimate range of $4.00 to $4.25, in spite of some foreign currency related earnings headwinds that we expect to face.”

Vertikal Comment

An unusual start to the year for JLG, but overall pretty good – and note that the business now represents over half of all Oshkosh revenues. The jump in the order book/backlog is substantial, and non-South American sales are quite upbeat.

The comparisons going forward are with a very good year in 2013/14, so are more challenging than to exceed. However the company has a slew of interesting new products on the horizon, while North America and several European markets are looking bright.

JLG looks to be well placed for another strong year.