Oshkosh Reports 6.6 Percent Sales Increase for Q3

August 1, 2008 • Oshkosh, Wis.-based Oshkosh Corporation, parent company of JLG Industries, reported fiscal 2008 third quarter earnings per share (EPS) of $1.19, on sales of $2 billion and net income of $88.8 million. Sales in the third quarter of fiscal 2008 increased 6.6 percent compared to last year's third quarter. These results included strong demand for defense vehicles and armor kits as well as access equipment products in international markets and a decrease in sales for the company's domestic commercial and access equipment segment products as a result of the slowdown in U.S. construction.

"We delivered solid results in our core businesses in the face of some very challenging end markets," said Robert Bohn, chairman and CEO of Oshkosh Corporation. "Strong sales of defense products and aerial work platforms highlighted our performance."

 

Access equipment segment sales increased 5.3 percent to $920.2 million for the third quarter of fiscal 2008 because of increased demand for aerial work platforms in Europe, favorable foreign exchange rates and increased demand for aftermarket parts and service, offset in part by lower worldwide shipments of telehandlers. Sales outside of North America increased over 20 percent versus the comparable prior year quarter, while sales in North America declined nearly 5 percent as a result of the weak U.S. construction markets.

 

"Looking to the fourth fiscal quarter, our EPS forecast of $0.50 to $0.65 includes lower expectations for our access equipment segment,” Bohn said. “We expect weak residential and non-residential construction in North America and certain areas of Western Europe to limit sales volume in the quarter. We also expect higher steel, fuel and other costs to have a more significant impact on fourth quarter earnings for the access equipment segment, in advance of our product selling price increases, which are effective October 1."

 

"We will continue to aggressively cut costs and optimize our operations for the benefit of our stakeholders,” Bohn said. “We are confidently moving forward with a series of actions that will improve our competitive position and our ability to succeed in difficult markets. Additionally, we will continue to invest prudently in growth initiatives to benefit our business when economies recover.”

 

Operating income in the third quarter of fiscal 2008 increased 27.3 percent to $125.2 million, or 13.6 percent of sales, compared to the prior year quarter operating income of $98.3 million, or 11.3 percent of sales. The increase in operating income in the third quarter was primarily the result of favorable foreign exchange rates as well as higher aftermarket sales and improved product and customer mix.

 

For the first nine months of fiscal 2008, the company recorded net income of $25.6 million, or $0.34 per share. Excluding impairment charges, the company reported that EPS increased 8.6 percent to $2.65 for the first nine months of fiscal 2008 on sales of $5.2 billion and net income of $198.7 million, compared to EPS of $2.44 for the first nine months of fiscal 2007 on sales of $4.5 billion and net income of $182.7 million. JLG was included in the company's operations for the first nine months of fiscal 2008 compared to only seven months in the prior year following the December 2006 acquisition of JLG.

 

Strong international sales at JLG and increased defense segment sales also contributed to current year sales increases compared to the prior year, while the commercial segment experienced a significant decline in sales due to lower demand in North America generally as a result of lower residential construction activity in the U.S. combined with the aftereffects of the 2007 diesel engine emissions standards changes.