26.01.2017

Revenues dip at JLG as profits rise

JLG has reported its first quarter results with revenues slipping almost eight percent to $489 million, sales of aerial lifts fell just over three percent to $234 million, while telehandler sales dropped 17 percent to $93 million and other revenues – including parts and service etc..fell almost eight percent to $162 million. Operating profit improved over 19 percent to $24.4 million. At the same time the backlog/order book dropped from $724 million to $594 million a fall of 17.5 percent.

Parent group Oshkosh posted revenues of 1.21 billion three percent lower than in the same quarter last year. Pre-tax profits improved over 45 percent to $23.6.

At the same time the company has announced a number of plant and facility closures and the streamlining of its European telehandler product line. This will cost around $45 to $50 million but is expected to save from $20 to $25 million from 2018.

Oshkosh chief executive Wilson Jones said: “We are pleased to report fiscal first quarter results that exceeded both the prior year and our expectations. This is a great way to kick off 2017, the year of our 100th anniversary at Oshkosh Corporation. Company-wide, our teams executed well. In particular, we experienced better than anticipated performance from our access equipment and defence segments.”

“Today, as part of simplification activities in support of the Company’s MOVE strategy, we are also announcing plans to rationalize operations in our access equipment segment by consolidating our manufacturing footprint in Europe and the United States. In addition, we are streamlining telehandler offerings to a reduced range in Europe to simplify our portfolio. These are difficult actions, but we believe they are necessary to position our company for long-term success.”

Vertikal Comment

This is a reasonable set of numbers from JLG, although telehandler sales are clearly struggling. The sharp fall in other revenues is a surprise as this tends to be made up of spare parts sales, service and rebuild business which tend to carry higher margins. Whether this is related to the change to the company’s decision to outsourcing its parts operations we do not know.

The market ought to pick up a little this year which could help the company although plant shutdowns and outsourcing can sap employee energy which might just limit the benefits that the company reaps from any uptick in the market? But things are not quite as simple as that.. with new competitors on the way and the bottom end of the market becoming more price sensitive, change is in the air. Who will do well and who will struggles it is hard to predict strong customer focus will as always win the day.