In its fiscal 2016 second quarter report, Oshkosh Corp. announced sales for JLG Industries, its access equipment segment, declined 23.2 percent to $754.3 million. The decline in sales was primarily due to the slowdown in North American replacement demand that began last summer and lower shipments of telehandlers in North America. In the second quarter of fiscal 2015, the access equipment segment experienced a large increase in telehandler sales related to the transition to Tier 4 engines.
JLG's operating income decreased 44.7 percent to $75.7 million, or 10.0 percent of sales, for the second quarter of fiscal 2016 compared to $136.9 million, or 13.9 percent of sales, in the second quarter of fiscal 2015. The decrease in operating income was primarily the result of the lower sales volume and a challenging pricing environment, the impact of a prior year benefit associated with a favorable vendor recovery settlement and adverse manufacturing absorption as the business significantly reduced production rates, offset in part by lower spending on engine emissions standards changes.
“Our North American access equipment rental customers, as expected, adopted a more cautious approach to rental fleet capital expenditures during the quarter," stated Wilson R. Jones, Oshkosh Corporation president and chief executive officer. "However, we believe rental company market conditions continue to support a reasonable level of fleet investment. We believe a generally more positive view on the U.S. economy, a solid construction outlook and a relatively mild winter in the U.S. led some rental companies to make access equipment purchase decisions earlier in the year than they may have previously planned, leading to higher than expected sales in the access equipment segment in the second quarter."
