Oshkosh Corporation, parent company of JLG, saw its consolidated net sales decrease by 7.5% to $1.25 billion in the first quarter of its 2016 financial year, compared to the same period in the previous year.
Higher sales in the defence and fire & emergency segments were not sufficient to offset a decline in sales at JLG, its access equipment segment, and to a lesser extent, the commercial segment. On a constant currency basis, sales decreased 6.4%.
JLG sales declined 26.1% to $529.8 million in the first quarter, primarily due to the slowdown in North American replacement demand that began last summer and lower shipments of telehandlers in North America.
In the first quarter of 2015, JLG had seen a big increase in telehandler sales to $290.4 million, ahead of price increases related to Tier 4 engine emissions standards changes. For the first quarter of 2016 the telehandler sales figure dropped to $111.8 million. That compares to aerial work platform sales in the first quarter of 2015 which stood at $277.3 million, compared to $242 million in the first quarter of this financial year.
A stronger US dollar also negatively impacted JLG’s sales in the current quarter by $12.6 million. On a constant currency basis, sales decreased 24.3%.
JLG’s operating income decreased 73.5% to $20.4 million, or 3.9% of sales for the first quarter of 2016 compared to $77.2 million, or 10.8% of sales, in the first quarter of 2015. This was primarily the result of the lower sales volume and adverse manufacturing absorption, said the company, as the business significantly reduced production rates compared to the prior year quarter. JLG’s first quarter results also included $1.2 million of restructuring costs related to workforce reductions.
Oshkosh reduced its full-year group fiscal 2016 earnings per share expectations from a range of $3.00 - $3.40 to $2.20 - $2.60 due to a delay in a Defence segment order and the difficult conditions in the access industry. “We are lowering our access equipment segment outlook for fiscal 2016 to reflect what we believe will be a more cautious approach to capital expenditures by rental companies than previously anticipated and a more competitive market environment, due in part to the continued strong US dollar.”
Oshkosh’s overall consolidated operating income in the first quarter was $30.3 million, or 2.4% of sales, compared to $65.7 million, or 4.9 % of sales, in the previous year first quarter.
“The fire & emergency segment reported another quarter of improved results compared to the prior year quarter. Additionally, the fire & emergency segment reported another quarter of strong orders. Defense segment results were also up compared to the prior year quarter as this segment rebounds from the trough experienced in fiscal 2015,” added Mr Jones.