28.01.2016

Telehandler slump hits JLG

JLG has reported a steep drop in revenues and profits for its first fiscal quarter, due to a collapse in telehandler shipments.

Total revenues for the quarter to the end of December were $529.8 million, down more than 26 percent on the same period last year. Aerial lift sales fell a more modest 12 percent to $242 million, while telehandler shipments dropped an eye watering 61 percent to $112 million, due says the company to the comparison with a strong surge in shipments last year to beat price increases related to the switch to new Tier 4 engines.

Slower aerial lift sales are related to capital expenditure dithering on the part of some large US rental companies. Other revenues – parts service etc.. surged 18 percent to $176 million.

Operating profits for the quarter plunged around 74 percent to $20.4 million. much of this was due to lower production and sales, but also include $1.2 million of restructuring costs related to workforce reductions. Some good news is that the order book/backlog at the end of December was only marginally – 8.5 percent - down on last year at $724.5 million.

Parent company Oshkosh saw its overall revenues fall seven percent, almost entirely due to the lower JLG contribution. Pre-tax profits slumped around 68 percent to $16.2 million again largely due to JLG.

Oshkosh chief executive Wilson Jones said: “Our first quarter results were largely in line with our expectations. Despite lower earnings in the first quarter compared to the prior year driven by lower access equipment segment results, we made progress on a number of fronts”.

Vertikal Comment

The scale of the telehandler fall off is a bit of a shock, however the headline a year ago was “JLG up on strong telehandler sales” after they jumped 33 percent in the quarter as buyers looked to beat the price rise and in some cases avoid the new Tier 4 engines. This should begin to alleviate as the year progresses, it might be that 2016 is the opposite of 2015, with a slower first half and stronger second half.

There is a good deal of nervousness in the market at the moment, more related to general world news that and the ridiculous fluctuations in the financial markets. Hopefully this will all settle as the year progresses, given that the underlying situation for most companies remains pretty good. Time will tell - one quarter does not a trend create.