29.01.2020

Lower sales - higher profits at JLG

JLG has reported lower first quarter sales and order intake, but higher profits.

Total revenues for the quarter to the end of December were down 13.1 percent compared to last year to $717.9 million. The decrease was due to lower sales of both aerial work platforms and telehandlers in North America and the Europe, Africa and Middle East region, partly offset by strong sales growth in the Asia Pacific region. The company says that the lower sales volumes in North America reflected rental company customers in this region slowing down their capital expenditures for fleet growth.

Sales of new aerial work platforms were just over nine percent lower at $306 million, while sales of telehandlers dropped more than 25 percent to $201.4 million and other revenues – including replacement parts, used equipment and service was almost four percent lower at $210.5 million.

Operating income improved 3.9 percent to $69.0 million thanks to “favourable price/cost dynamics and product mix and improved operational efficiencies, most of which were offset by the impact of the lower sales volume". The backlog/order book at the end of December was $1.01 billion, more than 39 percent down on this time last year.

Oshkosh as a whole saw revenues fall six percent to just under $1.7 billion, while pre-tax profits dropped more than 44 percent to $96.9 million.

Oshkosh chief executive Wilson Jones said: “We delivered first quarter results, including sales of $1.7 billion and earnings per share of $1.10, in line with our expectations. Our access equipment segment experienced lower market activity, despite these challenges, our team continued to embrace our People First culture and successfully executed the plan to deliver these results, including higher access equipment segment operating income on lower sales.”

“It is still early in the year, but there are a number of positive items that give us confidence in reaffirming our full year earnings per share estimates including first quarter results that were in line with our expectations, successfully concluding negotiations during the quarter with most of the access equipment segment’s key rental company customers, solid backlogs across all four segments and signs of stabilisation in macro-economic data.”

Vertikal Comment

The lower sales are no great surprise, not only have major rental companies held back on capital expenditure during the current economic uncertainties, but also many have delayed placing orders on a wait and see basis. On top of this is the comparison with a very strong first quarter last year, when sales up more than 30 percent, thanks mostly to a doubling of telehandler shipments in the quarter. Given that perspective and the fact that the company improved its profitability this is not such a bad result. As to how the full year pans out that will depend much on how the two spring exhibitions – the ARA and Conexpo – work out.