Soft housing market takes toll on Gehl
The softened home construction market resulted in a drop in net income for West Bend-based Gehl Co.
Continuation of market share gains in Gehl’s two primary product categories, skid loaders and telehandlers, strong agricultural markets and the growth of the company’s international distribution footprint partially offset the impact of weaker North American residential construction activity and lower capital investments by equipment rental companies, the firm said.
Retail demand in North America for skid loaders and telehandlers was down 8 percent and 28 percent, respectively, for the full year 2007, compared with 2006.
Thus, Gehl reported fourth quarter net income of $4.3 million, or 35 cents per share, which was down from $4.5 million, or 36 cents per share, in the same period a year ago. The company’s quarterly net sales dipped slightly to $102.2 million from $103.6 million a year earlier.
For the full year, the company’s net sales fell to $457.6 million from $486.2 million, but its net income still grew to $24.4 million from $19.5 million.
"We are pleased to report significant improvement in the company’s performance in difficult domestic markets, as reflected by our continued market share gains," said William Gehl, chairman and chief executive officer. "Gross margin expansion and the growth of our international sales are positive developments reflecting our global compact equipment strategy, investments in product research and development and continued emphasis on cost reductions."
The company does not anticipate that North American housing conditions will improve appreciably in 2008. While the company anticipates continued growth in the international markets, current forecasts anticipate that the North American compact equipment markets will decline 10 to 30 percent in 2008, varying by product category.
Joy Global reports record quarter
Joy Global Inc. reported fiscal first-quarter net income of $71 million, or 66 cents per share, up from $60 million, or 52 cents per share, in the same period a year ago.
The Milwaukee-based mining equipment manufacturer’s quarterly sales grew 14 percent to $640 million.
"New orders of $870 million were our second highest ever, and reflect the continued strength in our markets," said Mike Sutherlin, president and chief executive officer of Joy Global. "The current orders take our order bookings for the last four quarters to $3.2 billion and support our view that the industry’s growth will stay stronger for longer. We are gratified by the continued strong bookings of shovels in our P&H surface equipment business, even with lead times running into 2010. This quarter’s order rate was an all time record in our Joy underground equipment business, and combines the strength of its international markets with the improved outlook in U.S. coal. The events of the past few months have clearly demonstrated that the mining industry’s production capacity has fallen behind the growth in commodity demand, and this has resulted in supply shortages and dramatic increases in commodity prices. These price increases underlie the expectation that it will take several years and significant investment for capacity to catch up to demand. The expansion investments we completed and the operating improvements we made during fiscal 2007 allowed P&H to increase its surface mining sales by 24 percent, and we expect further improvements as we bring on additional capacity in 2008 and 2009."
Mark Readinger, president of Joy’s P&H Mining division, will be one of the featured CEO panelists at the Small Business Times Manufacturing Summit at the BizTech Expo.
