31.07.2018

JLG sales and profit surge

JLG has reported a very strong third quarter in terms of both revenues and profits.

Total revenues for the nine months to the end of June were 24 percent higher at $2.72 billion thanks to strong sales of both aerial lifts and telehandlers. Total new aerial lift sales were $1.46 billion up 23 percent on the same period last year, while telehandler sales increased 45 percent to $664.6 percent mostly in the United States. Spare parts, service and used equipment revenues were 7.5 percent higher at $590.1 million. Operating profit for the period was 260.8 million an increase of almost 33 percent on last year.

Moving on to the third quarter total revenues were $1.15 billion 18 percent higher than in the same quarter of 2017. This was made up of aerial work platform sales of $650.8 million – up 12 percent on the year, while telehandler sales jumped 48 percent to $300.2 million and parts and services revenues increased eight percent to $209.1 million. Operating profit for the quarter was almost 15 percent higher at $149.3 million due to the higher volumes and improved pricing, offset by challenges associated with the ramp up to higher production volumes, higher sales of lower margin products higher sales to high volume customers, increased freight costs and negative moves in exchange rates.

The order book at the end of the quarter was $1.23 billion, 2.3 times the level at this time last year.

Parent Oshkosh reported a 16.5 percent rise in nine month revenues to $5.65 billion, with pre-tax profits up 39.5 percent to $404.8 million.

Oshkosh chief executive Wilson Jones said: “We are pleased to report another quarter of solid performance, as our team members continued to execute our MOVE strategy. Despite the uncertainty surrounding the impact of trade policies, market fundamentals for our businesses are positive. Combined with a strong pipeline of defence business and higher backlog in all segments compared to the prior year, we are confident as we head into the last quarter of our fiscal year. The challenges we noted last quarter still exist and continued to impact us in the third quarter. But, the team is making progress addressing these challenges and we expect solid results to close out fiscal 2018.”

Vertikal Comment

A cracking set of numbers from JLG, although third quarter profits are clearly lagging behind revenue growth, but understandable given the rebound in telehandler sales, ongoing restructuring costs and rising costs – set to get higher as steel tariffs come into play.

The company is doing well and beginning to truly exploit the advantages that it
has due to its size, however this growth is possibly a little unbalanced with much, if not most of it coming from big American rental companies. Nothing wrong with that but the ongoing risks are that these lower margin buyers soak up too much of the production capacity creating longer lead times for smaller buyers. A nice problem to have for sure but if you are not careful it can create challenges further down the road.

However, this is not the time to pour cool water on what is without question a highly positive set of numbers. What will be interesting now is to compare them with the numbers from Genie and Haulotte – and if possible Skyjack when they are published.

JLG is on a roll and looks set to achieve a record year in terms of revenues and possibly post its first $5 billion year.