JLG Industries, the access equipment segment of Oshkosh Corp., reported a sales decline of 26.1 percent to $529.8 million for the first quarter of fiscal 2016, due primarily to a drop in demand for its telehandlers. According to reports, a slowdown in North American replacement demand for the machines began last summer, resulting in lower shipments.
Aerial lift sales fell 12 percent to $242 million, while telehandler shipments dropped 61 percent to $112 million. Other revenues grew 18 percent to $176 million.
Reports say the drop in telehandler demand appears drastic when compared with the strong surge in shipments during the first quarter of 2015, when JLG saw a sharp increase in telehandler sales in response to customers wanting to buy ahead of price increases stemming from the switch to new Tier 4 engines.
JLG's operating income decreased 73.5 percent to $20.4 million for the first quarter, compared to $77.2 million in fiscal first quarter 2015. This was due, in part, to lower production and sales, but also includes $1.2 million of restructuring costs related to workforce reductions. At the end of December, however, orders were only down marginally – 8.5 percent - on last year at $724.5 million.
Parent company Oshkosh saw its overall revenues fall seven percent, almost entirely due to the lower JLG contribution. Pre-tax profits dropped 68 percent to $16.2 million, also as a result of JLG.
“Our first quarter results were largely in line with our expectations," says Oshkosh chief executive Wilson Jones. "Despite lower earnings in the first quarter compared to the prior year driven by lower access equipment segment results, we made progress on a number of fronts."