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Oshkosh (OSK) Lags Q2 Earnings Estimates, Trims '22 EPS View

Zacks Equity Research
·4-min read

Oshkosh Corporation OSK reported second-quarter adjusted earnings of 41 cents per share, missing the Zacks Consensus Estimate of 93 cents. The underperformance can be attributed to lower-than-expected sales and earnings across all segments.  The bottom line also plunged from $2.09 recorded in the year-ago period. Our estimate for second-quarter 2022 EPS was $1.23.

In the quarter under review, consolidated net sales declined 6.4% year over year to $2,066 million. The top line also lagged the Zacks Consensus Estimate of $2,220 million. Our estimate for the top line was $2,196.6 million.

Segmental Details

Access Equipment: The segment’s net sales rose 5.7% year over year to $977.1 million on improved pricing actions. The metric, however, missed the consensus estimate of $1,075 million. Our estimate for the quarter was $1,046.6 million.

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Operating income fell 38.6% to $69.4 million (accounting for 7.1% of sales) owing to higher raw material costs, manufacturing inefficiencies and logistical challenges. The metric also trailed the Zacks Consensus Estimate of $74 million.  Our estimate for the quarter was $75.7 million.

Defense: The segment’s net revenues fell 24.1% year over year to $539.3 million, led by lower sales to the U.S. government. The metric also fell short of the Zacks Consensus Estimate of $575 million. Our estimate for the quarter was $553 million.

The operating income plunged 96.5% from the prior-year figure to $2.1 million (0.4% of sales). The downslide resulted from higher material costs and low sales. The metric significantly lagged the Zacks Consensus Estimate of $36.07 million.  Meanwhile, we estimated operating income from the segment to be $27.1 million.

Fire & Emergency: The segment’s revenues totaled $276.5 million, decreasing 8.6% year over year due to lower fire truck deliveries as components shortage put a lid on production. The metric also missed the Zacks Consensus Estimate of $316 million.  Our projection for the quarter was $311.6 million.

The segment’s operating income fell 48.8% year over year to $22.8 million (8.2% of sales) amid commodity inflation and dismal sales. The metric also missed the Zacks Consensus Estimate of $35.14 million. Our estimate for the quarter was $36.6 million.

Commercial: The segment’s net sales decreased 1% from the year-ago figure to $275.3 million due to lower refuse collection vehicle and front discharge concrete mixer volume. The metric also missed the Zacks Consensus Estimate of $284 million.  Our projection for the quarter was $279.1 million.

The segment’s operating profit declined 49% to $15.1 million (5.5% of sales), chiefly due to higher material costs and manufacturing inefficiencies. The metric also missed the Zacks Consensus Estimate of $18.79 million. Our projection for the quarter was $17.1 million.

Financials, Dividend & Buyback

Oshkosh had cash and cash equivalents of $397.4 million on Jun 30. The company recorded a long-term debt of $594.6 million as of Jun 30, 2022.

Oshkosh declared a quarterly cash dividend of 37 cents per share, to be paid out on Aug 29, 2022, to shareholders of record as of Aug 15, 2022. OSK repurchased nearly 757,158 million shares of common stock for $70 million during the quarter under review.

Outlook Trimmed

Taking into account, the supply chain snafus and increasing inflationary pressure, Oshkosh does not anticipate meeting its previous 2022 adjusted earnings guidance of $5-$6 per share. The company now estimates its EPS to be around $3.50. Revenues are anticipated around $8.3 billion.

Zacks Rank & Key Picks

Oshkosh currently carries a Zacks Rank #3 (Hold). A few better-ranked players in the auto space include Garrett Motion GTX and Commercial Vehicle Group CVGI. Both these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Switzerland-based Garrett designs, manufactures, and sells turbocharger and electric-boosting technologies. The Zacks Consensus Estimate for GTX’s 2022 earnings and sales implies year-over-year growth of 6.7% and 1.8%, respectively. The consensus mark for 2022 earnings has been revised upward by 5 cents in the past 60 days. Over the trailing four quarters, Garrett surpassed earnings estimates thrice and beat on the other occasion.

Ohio-based Commercial Vehicle Group supplies interior systems, vision safety solutions and other cab-related products for the global commercial vehicle market, including the heavy-duty (Class 8) truck market, the construction market and other specialized transportation markets. The Zacks Consensus Estimate for CVGI’s 2022 earnings and sales implies year-over-year growth of 6.2% and 2.6%, respectively. The consensus mark for 2022 earnings has been revised upward by 10 cents in the past 30 days.


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