Oshkosh Corp.

Oshkosh Corporation ( OSK - Snapshot Report ) stands to benefit from strong overseas demand for emergency equipment and a recovery in the U.S. housing sector. The Wisconsin-based specialty truck maker has delivered 13 straight positive earnings surprises, including a roughly 44% surprise in the most recent quarter. With low valuation metrics, including a price-to-sales (P/S) ratio at just 0.3, this Zacks #1 Rank (Strong Buy) is a value play.

Thirteenth Straight Beat

On October 26, Oshkosh posted fiscal fourth-quarter adjusted earnings of 65 cents per share, which surpassed the Zacks Consensus Estimate of 45 cents. This company has now topped the Zacks Consensus Estimate for a very impressive 13 consecutive quarters.

Revenues, however, edged lower by 2.3% year over year to $2.06 billion. Healthy growth across all non-defense segments was offset by a decline in the core defense business.

Revenues from the Access Equipment segment jumped 15.6% to $716 million, benefiting from higher volume in North America and price increases. Fire and Emergency segment sales climbed 14.3% to $228.9 million, while revenues from the Commercial unit soared 34.2% to $181.5 million. However, the company’s Defense division was the weak spot in the quarter with sales slipping 18.6% to $953.7 million.

Oshkosh reaffirmed its earnings from continuing operations target for fiscal 2013 of between $2.35 and $2.60 per share. Over the next 3 years, it aims to double its adjusted earnings from that of fiscal 2012. Oshkosh expects a recovery in housing to benefit its access equipment business, which includes telehandlers used in housing construction.

Separately, the company snubbed a roughly $3 billion takeover offer from Carl Icahn, its largest stakeholder, citing the bid of $32.50 per share as inadequate and not in the best interest of its shareholders.

Earnings Momentum Rising for Fiscal 2013

The Zacks Consensus Estimate for fiscal 2013 is up 3.2% in the last 30 days to $2.61 per share, reflecting a projected annualized growth of nearly 15%. There have been 7 upward revisions out of 12 total estimates in the past month, and also 2 upward revisions in the past 7 days.

A Value Stock

Oshkosh has a lot to attract investors seeking value. In addition to a low P/S, the stock has an attractive forward P/E ratio of 10.97. It also sports a low price-to-book (P/B) ratio of 1.5. (A P/S ratio lower than 1.0, a P/E below 15.0 and a P/B ratio under 3.0 generally indicate value.)

Oshkosh’s shares have performed reasonably well so far this year, generating a year-to-date return of roughly 27%. The stock has outperformed the S&P 500 over the past year, delivering a return of roughly 37% versus 14% for the benchmark.

Founded in 1917, Oshkosh Corporation makes an array of specialty vehicles and vehicle bodies globally. Its offerings include tactical trucks (including hauling tanks and missile systems) for the Department of Defense; aerial work platforms and telehandlers for a range of applications including construction; fire apparatus, emergency vehicles and refuse collection vehicles. Oshkosh, which has a market cap of roughly $2.6 billion, is among the leading defense vehicle manufacturers in the world. The U.S. government represented around 45% of its sales in fiscal 2012.

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