28.01.2014

Profits jump 85% at JLG

JLG has reported a 25 percent rise in first quarter aerial lift sales and an 85 percent jump in profits.

JLG's total revenues for the first quarter was $668.6 million, up 15 percent compared to last year, with aerial lift sales increasing over 25 percent to $316.5 million. Telehandler sales, which increased substantially last year, improved by a more modest five percent in the quarter to $217.7 million. Other revenues which include parts and service etc… were $134.4 million, an increase of around 10 percent.

Operating income at JLG leapt 85 percent to $90.3 million compared to $48.9 million in the same quarter a year ago. The only downside to today's numbers is a 39 percent drop in the order book/backlog, from $767.1 million at the end December 2012 to $468.4 million this year. This is said to be: “largely due to timing of orders from large U.S. national rental companies and also to completion of the military telehandler production in the fourth quarter, which represented $55.6 million of last year’s backlog.”

The company says that the overall improvement in revenues is principally the result of higher replacement driven aerial work platform sales in North America and Europe and improved pricing. It attributes the jump in operating income to favourable product mix, with more higher margin aerial work platforms, higher overall sales volume and the price increases. The numbers also benefited from a $7.5 million final pricing agreement on a multi-year U.S. military contract.

Chief executive Charles Szews said: “On-going strength in our access equipment segment, led by continued replacement demand in North America, offset the expected decline in our defence segment operating income. European rental companies also began placing orders for access equipment earlier in our fiscal year than in recent years, which could indicate a stronger recovery for access equipment in Europe in fiscal 2014 than previously expected.”

Oshkosh as a whole saw revenues for the quarter drop by 12.5 percent to $1.53 billion, but pre-tax profits improved almost 19 percent to $79.1 million.

Vertikal Comment

This is another excellent set of numbers for JLG which has more than held onto the strong growth in telehandler sales it experienced last year, while boosting sales of aerial lifts in spite of its price increases and stricter discount policies.

The steep drop in the order book is a little concerning, but if it is down to order timing from the big national rental companies, then all should be well as they are continuing to prosper and have no option but to maintain their fleet replacement programmes in the year ahead.

It will of course be interesting to see how these numbers compare with its big North American and global competitor Genie of course, but regardless of that this is a good result for the company and the industry. A good start to the new fiscal year.