29.07.2021

Massive bounce back at JLG

JLG's results for the nine months of its fiscal years show massive third quarter increases in sales and profits.

Starting with the numbers for the nine months to the end of June, total revenues increased 17 percent to $2.23 billion, made up of $1.09 billion in new aerial lift sales, up 35 percent on the same period last year. Telehandler sales however declined almost three percent to $531.4 million while other revenues (parts, service and used equipment etc…) were 12 percent higher at $603.4 million. Operating profits improved 26 percent to $218.4 million. The order book at the end of June was more than triple what it was this time last year at $1.75 billion. Almost nine months business at current levels.

Looking at the quarterly results, total sales increased almost 90 percent to $924.3 million. This was made up of aerial lift sales at $451 million - double last year’s number - telehandler sales up 83 percent to $233.5 million and other revenues up 72 percent to $259.9 million. Sales are currently buoyant but the fact that this quarter last year was by far the worst of the pandemic makes the comparison percentages so high. Operating profit for the quarter more than tripled to $113 million. The increase in operating income was driven by the higher sales volume and lower restructuring costs but offset in part by higher material costs and an adverse product mix.

Oshkosh chief executive John Pfeifer, said: “I’m proud of the focus shown by Oshkosh team members who persevered through a challenging supply chain environment to deliver solid sales and earnings during the third fiscal quarter. It’s no secret that global supply chain disruption and access to labour are presenting a challenge to industries around the globe, and our people have executed effectively to deliver strong results.”

“We are increasing our fiscal earnings per share expectations as a result of the tax benefit recognised in the third quarter offset in part by ongoing supply chain related challenges. Demand is strong across the markets where we compete, and we remain confident in the outlook for these markets. In particular, we are pleased with growing demand for access equipment, which we believe will remain strong for the foreseeable future.”

Vertikal Comment

No matter how you look at it this is a very encouraging set of numbers, even though much of the third quarter is a rebound from a dreadful quarter in 2020, and revenues are still well below the same period in 2019.

This is also another set of results which highlights the growing supply chain issues which look set to subdue the growth in production over the next year or so, while pushing up costs.

While this might sound negative it also presents manufacturers with an opportunity to improve margins and become more disciplined with finance. While rental companies might not like the sound of this it will also push up the real value of their fleets as used equipment prices rise, while also forcing them to increase rental rates and perhaps cut off sales to fiscally weak competitors. There will also be advantages for companies that are in strong positions with their suppliers and/or have alternatives.

Having said all this, this is a great result from JLG which looks set to have a very good year compared to 2020, with a chance to return to 2019 levels - or better - in 2022.

Really interesting times.