Newsletter #374 (View other news stories)
Equipment makers face ongoing market pressures
United States
Wednesday, 20 Aug 2008
 US manufacturers face lower profits.
PHOTO: SHUTTERSTOCK |
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Financial reports from Terex Corp, Oshkosh Corp and Nacco Industries Inc indicate a range of ongoing profit and sales pressures impacting makers of material handling equipment.
Terex says it is cutting aerial work platform (AWP) production to get its inventories in better alignment with market demand. The cuts in manufacturing capacity and head count reflect Terex’s anticipation of slower sales of AWPs during the second half of calendar 2008. Operating margins for the AWP segment of Terex of Westport, Connecticut declined to 18.6%, or USD125.3 million, for the second quarter ended on June 30 in comparison with 23.0%, or USD147.0 million, in the comparable 2007 quarter. The segment’s net sales increased 5.1% to USD672.7 million, although the change was approximately 1% if foreign currency exchange rate changes are excluded.
For its JLG business, Oshkosh reported softness in the United States market and stronger demand in Europe for the third quarter ended June 30.
The weak US construction market reduced demand for telehandlers, but there was strong demand in Europe for AWPs.
"Although the access equipment market in certain countries of Western Europe started to experience signs of weakness in the third quarter of fiscal 2008, sales in Europe overall increased nearly 30% versus the comparable prior year quarter," the Oshkosh, Wisconsin-based firm, said.
Oshkosh is launching a redesigned telehandler model in Europe and, in the short term, recorded lower orders for the current model.
Oshkosh acquired JLG Industries Inc of McConnellsburg, Pennsylvania in December 2006 for USD3.2 billion.
Profit for Nacco Material Handling Group Inc’s (NMHG) wholesale business was USD3.2 million for the second quarter ended June 30, less than a third of the comparable 2007’s USD10.4 million.
Unfavourable foreign currency movements, increased material and delivery costs, higher warranty costs and more sales, general and administrative expenses were contributors to the lower profit. On the positive side, NMHG increased sales of higher-priced units and parts and logged some success in passing price increases onto customers.
NMHG is a principal business of Nacco Industries Inc of Mayfield Heights, Ohio.
In a separate vein, Omni Energy Services Corp reported that operational integration of Industrial Lift Truck and Equipment Co Inc (ILT) into Omni’s land division partially offset a reduction in profits from the firm’s environmental services segment for the second quarter ended June 30.
Oil and gas industry supplier Omni of Carencro, Louisiana acquired ILT on April 24 for USD16.25 million in cash and USD4.0 million in promissory notes.
ILT provides more than 300 pieces of specialised rental equipment and offers related service through sites in Lafayette, Louisiana and Lincoln, Texas. Through the integration, ILT is gaining growth opportunities without additional infrastructure costs.
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