26.04.2017

JLG slips five

JLG has reported its half year results with overall sales just over five percent lower, with a steeper decline in profit.

Looking at the six months to the end of March total revenues were $1.2 billion just over five percent lower than last year. Sales of new aerial lifts were just over two percent lower at $603.1 million, while telehandler sales plunged 28 percent to $254.9 million and other revenues - mostly parts and service - improved four percent to $354.4 million. Operating profits were 31 percent lower at $66.5 million, although $17.2 million of this is due to restructuring charges involved with plant closures etc. The positive news is that the order book at the end of March was 11 percent higher at $723.2 million.

Moving on to the second quarter overall revenues were just over four percent lower at $723.2 million. This was made up of $369.4 million of new aerial lift sales - just over one percent lower than in the same quarter last year. Telehandler sales dropped 25 percent to $161.6 million, and other revenues were 17 percent higher at $192.2 million. Operating profits came in at $42.1 million, 44 percent down on last year, however $17.2 million of the $33.6 million drop was due to the previously mention restructuring charges.

The company said that the decline in sales was primarily due to lower telehandler sales volumes in North America and Europe, but also a more competitive pricing environment, offset in part by higher sales of used equipment and service, which also impacted the operating income, along with higher SG&A costs, including higher trade show expenses.

Oshkosh as a whole reported half year revenues of $2.83 billion up two percent on this time last year, while pre-tax profits were flat at $91.1 million.

Oshkosh chief executive Wilson Jones said: “We are pleased with our second quarter results and have a positive outlook, supported by favourable market dynamics in our defence and fire & emergency segments as well as opportunities to drive additional shareholder value through continued execution of our MOVE strategy and the benefit of aging customer fleets that will eventually need to be replaced. As we celebrate our 100th anniversary, our team members are engaged and energised about the future.”

“As a result of our solid performance in the first half of fiscal 2017 and positive outlook for the remainder of the year, we are raising our full-year fiscal 2017 earnings per share estimate range to $2.70 to $3.00 and our adjusted earnings per share estimate range to $3.20 to $3.50.”

Vertikal Comment

These numbers are entirely surprising, given the company’s decision to cut back on European telehandler sales and the tougher market in North America. It looks as though aerial lift sales might well be on the way back up, while the parts and service operations appear to be doing well, which is interesting given that the company has been outsourcing the logistics side of that business.
The decline in telehandler sales should stabilise in the next quarter all of which might mean that JLG will fare better for the full year than these numbers might suggest?

Some of the smaller competitors such as Haulotte and Skyjack have been outperforming the big two in terms of sales, while JCB and Manitou appear to be causing some challenges in the telehandler market. JLG does though have some interesting new products on the way which could serve it well in 2018 after a mixed 2017.