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Oshkosh's (OSK) Q1 Earnings Beat Estimates, Sales Down Y/Y
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Oshkosh Corporation (OSK - Free Report) reported first-quarter fiscal 2021 (ended Dec 31, 2020) adjusted diluted earnings of $1.13 per share, up from the $1.1 recorded in the year-ago period.
Moreover, the fiscal first-quarter earnings surpassed the Zacks Consensus Estimate of 69 cents. This outperformance stemmed from higher-than-anticipated operating income across all four segments of the company.
For the reported quarter, consolidated net sales declined 7% from the prior-year period to $1,577 million. Revenues, nevertheless, surpassed the Zacks Consensus Estimate of $1,519 million.
For the fiscal first quarter, consolidated operating income slipped 12.1%, year over year, to $95.9 million (accounting for 6.1% of sales).
Oshkosh Corporation Price, Consensus and EPS Surprise
For the December-end quarter, net sales in Access equipment slid 21.5% year over year to $563.7 million on lower market demand as a result of the coronavirus pandemic. The metric, however, topped the consensus estimate of $528 million. Operating income also tanked 63.9% from the prior-year quarter to $24.9 million (4.4% of sales). This downside primarily resulted from the impact of lower sales volume and adverse absorption amid lower production and restructuring charges of $8 million, partially offset by lower spending as a result of temporary cost reductions.
The Defense segment’s net sales increased 10% year on year to $550.3 million during the fiscal first quarter on increased aftermarket parts and service sales. The sales figure also surpassed the consensus mark of $522 million. Operating income surged 70.3% from the prior-year figure to $52.8 million (9.6% of sales). The upswing was chiefly driven by an increase in the cumulative catch-up adjustment on contract margins of $11 million, favorable product mix and the positive impact of higher sales volumes, negated by higher new product development spending to some extent.
Net sales in the Fire & Emergency segment totaled $273.9 million, outpacing the Zacks Consensus Estimate of $269 million. The reported figure, moreover, increased 6.6% year over year. This uptrend resulted from higher aircraft rescue and firefighting vehicle volume as a series of multi-unit international awards were recognized in the reported quarter. In fact, the higher sales volume and reduced spending as a result of the pandemic boosted the segment’s operating income by 13.6% year on year to $35.1 million (12.8% of sales).
Net sales in the Commercial segment dropped 12.7% from the year-ago figure to $195.7 million during the fiscal first quarter on lower refuse collection vehicle demand amid the coronavirus pandemic and the negative impact of the sale of the concrete batch plant business in the fourth quarter of fiscal 2020. The figure also lagged the consensus estimate of $209 million. The segment’s operating income also plummeted 33.1% from the prior-year period to $11.9 million (6.1% of sales), chiefly due to the unfavorable impact of lower sales volumes and higher material costs, partially negated by reduced spending as a result of temporary cost reductions in response to the pandemic.
Financials & Dividend
Oshkosh had cash and cash equivalents of $898.6 million as of Dec 31, 2020, up from the $264 million reported in the prior-year period. The company recorded a long-term debt of $818.1 million as of Dec 31, 2020, slightly down from the $819.2 million as of Dec 31, 2019. Net cash provided by operating activities for the three-month period ended Dec 31, 2020 was $368.1 million as compared with the net cash used in operating activities of $149.9 million seen in the prior year.
Oshkosh’s board announced a quarterly cash dividend of 33 cents per share for shareholders. The dividend amount will be paid on Feb 26 to shareholders of record as of Feb 12, 2021.
Highlights of the Reported Quarter
During the reported quarter, Oshkosh’s defense arm secured an order for joint light tactical vehicles (JLTV) worth $911 million from the U.S. Army Contracting Command, Detroit Arsenal, making it the second largest order till date for Oshkosh Defense JLTVs. This is the third consecutive year that the company has received a large JLTV delivery order, and the backlog provides a robust base for its Defense segment, in turn, opening up bright prospects.
Last December, Oshkosh also announced plans to acquire Pratt Miller, an advanced engineering, technology and innovation firm. The transaction was closed in mid-January 2021. This buyout will help Oshkosh navigate to the untapped market of uncrewed ground vehicles and establish a robust foothold there, enhancing its offerings. Moreover, the combination of Pratt Miller’s engineering specialty with Oshkosh’s innovation and operational efficiency will enable the latter to better serve customers and fuel its long-term growth.
Outlook
The company has refrained from providing a quantitative outlook for fiscal 2021, as the timing and magnitude of recovery in the Access Equipment segment and some commercial markets continue to be uncertain. Nonetheless, the company anticipates improvements in the end markets served and is optimistic to grow through fiscal 2021.
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
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Oshkosh's (OSK) Q1 Earnings Beat Estimates, Sales Down Y/Y
Oshkosh Corporation (OSK - Free Report) reported first-quarter fiscal 2021 (ended Dec 31, 2020) adjusted diluted earnings of $1.13 per share, up from the $1.1 recorded in the year-ago period.
Moreover, the fiscal first-quarter earnings surpassed the Zacks Consensus Estimate of 69 cents. This outperformance stemmed from higher-than-anticipated operating income across all four segments of the company.
For the reported quarter, consolidated net sales declined 7% from the prior-year period to $1,577 million. Revenues, nevertheless, surpassed the Zacks Consensus Estimate of $1,519 million.
For the fiscal first quarter, consolidated operating income slipped 12.1%, year over year, to $95.9 million (accounting for 6.1% of sales).
Oshkosh Corporation Price, Consensus and EPS Surprise
Oshkosh Corporation price-consensus-eps-surprise-chart | Oshkosh Corporation Quote
Segmental Details
For the December-end quarter, net sales in Access equipment slid 21.5% year over year to $563.7 million on lower market demand as a result of the coronavirus pandemic. The metric, however, topped the consensus estimate of $528 million. Operating income also tanked 63.9% from the prior-year quarter to $24.9 million (4.4% of sales). This downside primarily resulted from the impact of lower sales volume and adverse absorption amid lower production and restructuring charges of $8 million, partially offset by lower spending as a result of temporary cost reductions.
The Defense segment’s net sales increased 10% year on year to $550.3 million during the fiscal first quarter on increased aftermarket parts and service sales. The sales figure also surpassed the consensus mark of $522 million. Operating income surged 70.3% from the prior-year figure to $52.8 million (9.6% of sales). The upswing was chiefly driven by an increase in the cumulative catch-up adjustment on contract margins of $11 million, favorable product mix and the positive impact of higher sales volumes, negated by higher new product development spending to some extent.
Net sales in the Fire & Emergency segment totaled $273.9 million, outpacing the Zacks Consensus Estimate of $269 million. The reported figure, moreover, increased 6.6% year over year. This uptrend resulted from higher aircraft rescue and firefighting vehicle volume as a series of multi-unit international awards were recognized in the reported quarter. In fact, the higher sales volume and reduced spending as a result of the pandemic boosted the segment’s operating income by 13.6% year on year to $35.1 million (12.8% of sales).
Net sales in the Commercial segment dropped 12.7% from the year-ago figure to $195.7 million during the fiscal first quarter on lower refuse collection vehicle demand amid the coronavirus pandemic and the negative impact of the sale of the concrete batch plant business in the fourth quarter of fiscal 2020. The figure also lagged the consensus estimate of $209 million. The segment’s operating income also plummeted 33.1% from the prior-year period to $11.9 million (6.1% of sales), chiefly due to the unfavorable impact of lower sales volumes and higher material costs, partially negated by reduced spending as a result of temporary cost reductions in response to the pandemic.
Financials & Dividend
Oshkosh had cash and cash equivalents of $898.6 million as of Dec 31, 2020, up from the $264 million reported in the prior-year period. The company recorded a long-term debt of $818.1 million as of Dec 31, 2020, slightly down from the $819.2 million as of Dec 31, 2019. Net cash provided by operating activities for the three-month period ended Dec 31, 2020 was $368.1 million as compared with the net cash used in operating activities of $149.9 million seen in the prior year.
Oshkosh’s board announced a quarterly cash dividend of 33 cents per share for shareholders. The dividend amount will be paid on Feb 26 to shareholders of record as of Feb 12, 2021.
Highlights of the Reported Quarter
During the reported quarter, Oshkosh’s defense arm secured an order for joint light tactical vehicles (JLTV) worth $911 million from the U.S. Army Contracting Command, Detroit Arsenal, making it the second largest order till date for Oshkosh Defense JLTVs. This is the third consecutive year that the company has received a large JLTV delivery order, and the backlog provides a robust base for its Defense segment, in turn, opening up bright prospects.
Last December, Oshkosh also announced plans to acquire Pratt Miller, an advanced engineering, technology and innovation firm. The transaction was closed in mid-January 2021. This buyout will help Oshkosh navigate to the untapped market of uncrewed ground vehicles and establish a robust foothold there, enhancing its offerings. Moreover, the combination of Pratt Miller’s engineering specialty with Oshkosh’s innovation and operational efficiency will enable the latter to better serve customers and fuel its long-term growth.
Outlook
The company has refrained from providing a quantitative outlook for fiscal 2021, as the timing and magnitude of recovery in the Access Equipment segment and some commercial markets continue to be uncertain. Nonetheless, the company anticipates improvements in the end markets served and is optimistic to grow through fiscal 2021.
Zacks Rank & Stocks to Consider
Oshkosh currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the same sector are American Axle (AXL - Free Report) , Magna International (MGA - Free Report) and Dana Incorporated (DAN - Free Report) , all of which sport a Zacks Rank of 1 (Strong Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
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Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>