30.04.2018

JLG surges ahead

JLG has reported a massive increase in first half and second quarter revenues with higher sales across the board.

Six month revenues to the end of March were 29 percent higher than last year, at $1.56 billion. This was made up of a 34.5 percent leap in aerial work platform sales to $810.7 million, while telehandler sales jumped 49.5 percent to $364.4 million. Other revenues, including spare parts and used equipment were 7.5 percent higher at $381 million. Operating profits for the first half increased almost 68 percent to $111.5 million. The order book /backlog at the end of the period was more than 2.5 times that of last year, rising from $737.9 million at the end of March 2017 to $1.79 billion this year.

Moving on to the second quarter overall revenues were 28 percent higher at $927.9 million with all geographic regions posting double digit growth. In terms of breakdown aerial lift sales, the strong upward trend of the first quarter continued with sales jumping 32 percent to $487.2 million. Telehandler sales grew at an even faster pace rising 45 percent to $234.9 million. Other revenues were improved by a more modest 7.5 percent to $205.8 million. Operating profit for the quarter more than doubled from $42.1 million last year to $97.7 million this year.

JLG parent company Oshkosh also did well with half year revenues almost 23 percent higher at $3.47 billion while pre-tax profits more than doubled to $207.7 million.

Oshkosh chief executive Wilson Jones said: “We are pleased to report another quarter of solid results highlighted by growth in revenue, adjusted operating income and adjusted earnings per share. We continued to benefit in the quarter from a positive economic environment in the United States and strong demand globally for our products. We are also experiencing some challenges related to the positive economic environment, including a tight labour market, a more constrained supply chain and higher logistics and material costs. We are proactively addressing these headwinds, including implementing steel and aluminium surcharges in our non-defence segments.”

“During the quarter, our defence segment was awarded the U.S. Army’s FMTV A2 contract providing our team with another tactical wheeled vehicle program of record and solidifying our position as the United States’ premier manufacturer of world class military vehicles. This award gives us visibility to supply the United States military with these impressive medium payload vehicles well into the next decade.”

“As a result of our solid second quarter performance and our positive outlook for the remainder of the year, we are raising our full year fiscal 2018 earnings per share estimate range to $5.10 to $5.55”

Vertikal Comment

This is an outstandingly strong set of numbers from JLG, partly boosted by a comparison with a weak first half last year, which was later compensated for by a stronger second half. However, the main thing is that customers are investing heavily again, as the second half trend from last year continues to gather pace, and more importantly this is now happening across the world. Assuming the upward trend shows no signs of slowing we are likely to see a record breaking year for JLG, as the company edges closer to achieving billion dollar quarters.

However, there is a dark cloud in the horizon of steel an aluminium price increases which has already been a factor, due to market pressures, but may now be driven even higher by the Trump import tariffs. Also, component supply lines are beginning to cause issues for many manufacturers as they reach full capacity. This will almost inevitably place some restraints on the pace of growth while they – the component makers - try to ramp up production. But given the current political uncertainties, one wonders if they will make invest production facility expansion?

Interesting times but a very very positive result from JLG