Not Unexpected, JLG Net Sales Drop 13.1 Percent in Fiscal First Quarter
JLG, the access segment of Oshkosh Corp., posted net sales in the first quarter of fiscal 2020 of $717.9 million, a 13.1-percent year-over-year decline. The decrease in sales, which the company expected, was the result of lower sales volumes for both aerial work platforms and telehandlers in North America and the Europe, Africa and Middle East region. The decline in those regions was partially offset by continued strong sales growth in the Asia Pacific region. The lower sales volumes in North America reflected rental company customers slowing down their capital expenditures for fleet growth.
Access equipment segment operating income in the first quarter of fiscal 2020 increased 3.9 percent to $69 million or 9.6 percent of sales, compared to $66.4 million or 8 percent of sales in the first quarter of fiscal 2019. The increase in operating income was primarily because of favorable price/cost dynamics, favorable mix and improved operational efficiencies, largely offset by the impact of lower sales volume.
For the quarter, net sales of aerial work platforms were $306 million compared to $337.7 million in the year-ago quarter, a 9.4-percent decrease. Net sales of telehandlers slid from $269.5 million in fiscal Q419 to $201.4 million, a 25.3-percent slide.
The net sales of “other,” which would include parts and service, decreased a smaller amount, from $219.3 to $210.5, a 4-percent drop.
Oshkosh Corp. as a whole posted $1.7 billion in consolidated net sales, a 6-percent year-over-year decrease.
“We delivered first quarter results, including sales of $1.7 billion and earnings per share of $1.10, in line with our expectations,” said Wilson Jones, president and CEO of Oshkosh Corp. “With large favorable contract adjustments in the defense segment last year, we expected lower earnings in the quarter compared to the prior fiscal year quarter. Also, during the quarter, 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’s 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 estimate range of $7.30 to $8.10, including first quarter results that were in line with our expectations, successfully concluding negotiations with most of the access equipment segment’s key rental company customers; solid backlogs across all four segments and signs of stabilization in macro-economic data.”
About the Author
Michael Roth
Editor
Michael Roth has covered the equipment rental industry full time for RER since 1989 and has served as the magazine’s editor in chief since 1994. He has nearly 30 years experience as a professional journalist. Roth has visited hundreds of rental centers and industry manufacturers, written hundreds of feature stories for RER and thousands of news stories for the magazine and its electronic newsletter RER Reports. Roth has interviewed leading executives for most of the industry’s largest rental companies and manufacturers as well as hundreds of smaller independent companies. He has visited with and reported on rental companies and manufacturers in Europe, Central America and Asia as well as Mexico, Canada and the United States. Roth was co-founder of RER Reports, the industry’s first weekly newsletter, which began as a fax newsletter in 1996, and later became an online newsletter. Roth has spoken at conventions sponsored by the American Rental Association, Associated Equipment Distributors, California Rental Association and other industry events and has spoken before industry groups in several countries. He lives and works in Los Angeles when he’s not traveling to cover industry events.