01.11.2011

Strong finish for JLG

JLG has reported a strong fourth quarter with external sales up 61 percent, while profits quadrupled on strong order intake.

Looking at the full year to the end of September, overall revenues actually fell from over $3 billion last year to just over $2 billion this year. However this is entirely due to the ending of intercompany sales of defence components to parent Oshkosh for as its M-ATV as that contract was completed.
Sales of access equipment and telehandlers to external customers was up almost 53 percent to $1.94 billion. Lower overall sales also affected operating income which dropped from 97.3 million to 65.3 million.

The fourth quarter is however considerably ‘cleaner’ up more than 25 percent at $673.5 million of which $619.6 million is telehandler and access shipments – 60.7 percent higher than for the same period last year. Operating income also benefited from the large increase in normal margin business rising by more than 475 percent to $34.8 million.

The company’s order book jumped to $729.2 million, 370 percent higher than this time last year and 19 percent up on the end of the third quarter.
JLG says that the higher sales are largely due to increased demand for replacement equipment in North America and parts of Europe.

Chief executive Charles Szews said: "We are pleased with the continued improvement in our global access equipment markets during the fourth quarter, with orders rising 91 percent compared to the fourth quarter of the prior year. Despite the continued uncertain economic environment, rental equipment utilisation and rental rates strengthened during the fourth quarter in North America, and emerging markets continue to exhibit positive growth trends. We continue to expect strong growth in fiscal 2012."

Oshkosh as a whole reported revenues for the full year down 23 percent to $7.58 billion, while pre-tax profits were slashed from $1.2 billion last year to $416.5 million this year. Mostly due to the completion of the initial 8,079 vehicles under the Company's M-ATV contract.

Vertikal Comment

Overall this is a good result for JLG and for Oshkosh, as the massive peak in US defence spending winds down to more sustainable levels, JLG is on the increase, exactly what Oshkosh had intended with its acquisition of JLG.

These latest results also suggests that JLG might be pulling ahead of Genie with its access and telehandler sales for the last nine months being around 25 percent higher than those of Terex AWP- along with its order book. However much, if not all of this could be down to JLG’s larger telehandler business in North America? My guess is that sales of aerial lifts for the two companies will still be quite similar – not that it is critically important.

The most important factor is that all of the major powered access and telehandler manufacturers are seeing very strong improvements in sales and profits and that they are reasonably optimistic for 2012. Something that is good for us all in these days of economic uncertainty.