Fast on the heels of an intriguing deal with Caterpillar
Sales climbed 56% in the quarter, with exceptional growth across the board. While the operating margin eased off just slightly from the immediately prior quarter, the year-over-year comparison was very positive as the company reversed an operating loss. So, too, on the bottom line, where the company reported $0.53 per share (versus a loss last year) and smoked the published estimates.
While this is a cyclical business, the cycle seems to still be in the buildup phase. The company's quarter-end order book stood at $849 million -- well ahead of both the year-ago level of $200 million and last quarter's $631 million. With hot demand, the company is also doing a good job of controlling costs: Unrecovered steel expenses declined from $0.39 per share a year ago to $0.07 this quarter.
One of the little details I found especially interesting was that the company reported a 70% rise in European sales. Now, I'll grant that this number is helped by the fact that the company is growing from a smaller base, but given all the reports of weakness in the Western European economies, I find this result impressive all the same. It is proof positive yet again that some companies can, in fact, grow no matter what the overall environment.
I'd caution investors not to make too big a deal out of the decline in cash flow in this quarter versus the year ago period. The culprits were working-capital items, and on a structural free cash flow basis, this quarter's performance was actually much better.
It's extremely difficult to call a top in a cyclical market, so I won't try. I'll simply say that JLG is doing a great job today but that the stock is not too likely to reproduce the one-year triple that we've already seen.
For other constructive Takes:
Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).
