Oshkosh Corporation Reports Financial Results for Q3 2024

Oshkosh Corporation (NYSE: OSK) has reported a 9% increase in revenue to $2.74 billion for the third quarter of 2024, with an adjusted operating margin of 10.3% and adjusted earnings per share (EPS) of $2.93. Despite facing softer market conditions in North America, the company has commenced service with the U.S. Postal Service's next-generation delivery vehicles and predicts strong long-term growth. However, Oshkosh has adjusted its full-year EPS outlook downward and expects some market softness in 2025.

Key Takeaways

• Oshkosh Corporation reported a 9% revenue increase in Q3 2024.
• Adjusted EPS met expectations at $2.93, with a reduced full-year outlook to $11.35.
• The U.S. Postal Service began using Oshkosh's next-generation delivery vehicles.
• The Access segment saw growth but faces pressures from higher interest rates.
• Vocational segment revenue rose by 17.6%, with a strong demand backlog.
• Defense segment sales increased by 14%, with NGDV production as a key contributor.
• Oshkosh completed the acquisition of AUSA, enhancing its specialty equipment offerings.
• The company remains optimistic about long-term growth despite current challenges.

Company Outlook

• Oshkosh expects consolidated sales of around $10.6 billion for 2024.
• Adjusted operating income is projected to be about $1.1 billion.
• The Access segment is forecasted to reach $5.1 billion in sales.
• Vocational sales are expected to hit $3.25 billion.
• Capital expenditures reduced to $275 million, with free cash flow estimated at $350 million.
• The company projects sales of approximately $3.25 billion for the upcoming period, with an adjusted operating margin of 13.25%.

Bearish Highlights

• Full-year EPS outlook lowered due to softer market conditions in North America.
• Some orders have been delayed or canceled, impacting the backlog.
• Market softness anticipated in 2025, particularly in private construction.

Bullish Highlights

• Strong demand in the vocational segment and a growing backlog.
• Positive synergies from the AeroTech acquisition, focusing on electrification and autonomy.
• Healthy backlog and expectations for growth in infrastructure investments.
• The Defense segment is expected to maintain an adjusted operating margin of 2.25%.

Misses

• Adjusted EPS outlook for 2024 revised down from $11.75 to $11.35.
• Free cash flow estimates lowered by $25 million to $350 million.

Q&A Highlights

• Deliveries of the NGDV program are increasing, with production ramping up through 2025.
• Pricing for the current backlog is locked in, despite potential input cost changes.
• The electrification market for commercial vehicles is developing, with gradual growth expected over the next 10 to 20 years.
• Oshkosh will showcase its innovations at the CES show in Las Vegas in early January.

Oshkosh Corporation continues to navigate market fluctuations with a focus on innovation, technological advancements, and strategic acquisitions. With a solid backlog and strategic initiatives in place, the company is poised for long-term growth despite short-term market softness.

InvestingPro Insights

Oshkosh Corporation's (OSK) recent financial performance and market position are further illuminated by data from InvestingPro. The company's market capitalization stands at $7.02 billion, reflecting its significant presence in the specialty vehicle and vehicle body markets.

InvestingPro data shows that Oshkosh's P/E ratio is currently 10.39, with an adjusted P/E ratio of 9.24 for the last twelve months as of Q2 2024. These figures align with the company's "InvestingPro Tip" that it is trading at a low earnings multiple, which could be attractive to value investors, especially considering the company's recent revenue growth of 15.82% over the last twelve months.

The company's financial health appears robust, with an "InvestingPro Tip" indicating that liquid assets exceed short-term obligations. This financial stability is crucial as Oshkosh navigates the softer market conditions mentioned in the earnings report and prepares for potential challenges in 2025.

Another noteworthy "InvestingPro Tip" is that Oshkosh has raised its dividend for 11 consecutive years, with a current dividend yield of 1.73%. This consistent dividend growth, coupled with a 12.2% dividend increase over the last twelve months, underscores the company's commitment to shareholder returns despite market fluctuations.

The company's profitability is further emphasized by its impressive EBITDA growth of 65.16% over the last twelve months, which supports the positive outlook on long-term growth mentioned in the earnings report.

Oshkosh Corporation continues to emphasize its technological advancements and market innovations, expecting the demand for its products to maintain an upward trend as they adapt to the evolving market needs. Additionally, they plan to showcase these innovations at upcoming industry events, solidifying their commitment to leading the future of specialty vehicles.

Full transcript – Oshkosh Corporation (OSK) Q3 2024:

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Oshkosh Corporation remains dedicated to innovation and continuous improvement to meet evolving market demands.