30.10.2019

Slower quarter for JLG

JLG has posted its full year results for the 12 months to the end of September with a slower fourth quarter.

Total revenues for the 12 months were $4.08 billion an increase of eight percent on 2018. The sales were made up of $1.94 billion of aerial work platforms, four percent lower in the same period last year. Telehandler sales improved 33 percent to $1.26 billion, while other revenues - including parts and service - were 8.5 percent higher at $880.4 million. The company’s order book/backlog at the end of September was $390.1 million, down from $962.4 million at this time last year. Operating profit for the period was $502.6 million, up almost 30 percent on 2018.

Moving on to the fourth quarter, total revenues were over four percent lower at $1,017 million, made up of $479 million of aerial work platform shipments, down almost 14 percent. Telehandler sales however were eight percent higher at $307 million, while other revenues improved more than four percent at $230.5 million. Operating profits were flat at $126.5 million.
Parent company Oshkosh posted full year revenues up 8.5 percent at $8.38 billion, while pre-tax profits were more than 26 percent higher at $750.7 million.

Oshkosh chief executive Wilson Jones said: “We finished the year on a high note with strong fiscal fourth quarter earnings. Our strong fourth quarter performance was the result of commitment by our entire team. Our fire & emergency and defence segments both posted double digit percentage revenue and adjusted operating income growth compared with last year and our commercial segment delivered higher sales and operating income as well. Our access equipment team delivered strong results in the face of moderating demand in their key rental equipment markets.”

“Looking ahead, I am confident in our team’s ability to navigate through changing market conditions in our access equipment segment and position Oshkosh to continue to deliver strong results. Our defence, fire & emergency and commercial segments provide a solid foundation for the company in fiscal 2020. Our rental equipment customers in North America and Europe are taking a cautious approach to capital expenditures, which we believe will lead to lower, but still historically strong, sales and earnings in the access equipment segment in fiscal 2020.”

Vertikal Comment

While this is a good full year performance from JLG, storm clouds appear to be gathering as reflected in lower order intake depleting the company’s order book as rental companies hold back from investing due to growing economic uncertainty.

Given that underlying medium-term demand appears to be strong, the situation could change rapidly if we were to see some of the uncertainties sorted out, leading to an economic ‘bounce back’. However, given that we are going into an election year that might be wishful thinking. If we see a tougher year in 2020, there is currently every chance that the situation will improve in 2021, while throwing up all manner of opportunities as some companies suffer more than others.

All in all, Oshkosh and JLG look to be in a stronger position than at the start of the year and ready for whatever the market throws at it.