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Oshkosh (OSK) Up 2.6% Since Last Earnings Report: Can It Continue?
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It has been about a month since the last earnings report for Oshkosh (OSK - Free Report) . Shares have added about 2.6% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Oshkosh due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Oshkosh's Q2 Earnings Top Mark, Up Y/Y
Oshkosh reported second-quarter fiscal 2021 (ended Mar 31, 2021) adjusted earnings of $1.48 per share, up from $1.25 recorded in the year-ago period. Moreover, fiscal second-quarter earnings surpassed the Zacks Consensus Estimate of $1.15. This outperformance primarily stemmed from higher-than-anticipated revenues and operating income from the Access Equipment and Fire & Emergency segments of the company.
For the reported quarter, consolidated net sales edged up 5.1% from the prior-year period to $1,889 million. The top line also surpassed the Zacks Consensus Estimate of $1,755 million.
For the fiscal second quarter, consolidated operating income rose 5.4%, year over year to $140.8 million (accounting for 7.5% of sales).
Segmental Details
For the March-end quarter, net sales in Access Equipment grew 6.5% year over year to $738.2 million on improved market demand in North America and Asia. The metric also topped the consensus estimate of $639 million. Operating income surged 13.7% from the prior-year quarter to $80.5 million (10.9% of sales) and surpassed the consensus mark of $58 million. This upside primarily resulted from higher sales volumes and revenues, improved product mix as well as lower spending.
The Defense segment’s net sales slipped 2.6% year on year to $614.7 million for the fiscal second quarter owing to lower volumes. The sales figure, however, surpassed the consensus mark of $600 million. Operating income dipped 40.5% from the prior-year figure to $35.5 million (5.8% of sales). The decline chiefly resulted from a decrease in the cumulative catch-up adjustment on contract margins and higher new product development spending.
Net sales in the Fire & Emergency segment totaled $312.5 million, outpacing the Zacks Consensus Estimate of $275 million. The reported figure also increased 29% 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, higher sales volume and reduced spending as a result of the pandemic boosted the segment’s operating income by 149.5% year on year to $47.4 million (15.2% of sales). The metric also topped the consensus mark of $30.98 million.
Net sales in the Commercial segment inched down 2.8% from the year-ago figure to $230 million for the fiscal second quarter on lower refuse collection vehicle demand amid the coronavirus pandemic and negative impact of the sale of the concrete batch plant business in fourth-quarter fiscal 2020. The segment’s operating income, however, jumped 132.1% from the prior-year period to $18.8 million (8.2% of sales), chiefly due to lower warranty costs, reduced spending and low product liability costs.
Financials & Dividend
Oshkosh had cash and cash equivalents of $1,093.2 million as of Mar 31, 2021. The company recorded a long-term debt of $818.3 million as of Mar 31, 2021. Net cash provided by operating activities for the three-month period ended Mar 31, 2021 was $326.8 million.
Oshkosh’s board announced a quarterly cash dividend of 33 cents per share for shareholders. The dividend amount will be paid on May 28 to shareholders of record as of May 14, 2021.
FY21 View
The company expects fiscal 2021 adjusted EPS in the band of $6.35-$6.85 per share. Revenues are forecast in the range of $7.75-$7.95 billion. Adjusted operating income is envisioned between $610 million and $655 million.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month. The consensus estimate has shifted 17.4% due to these changes.
VGM Scores
Currently, Oshkosh has a strong Growth Score of A, a grade with the same score on the momentum front. Following the exact same course, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Oshkosh has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
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Oshkosh (OSK) Up 2.6% Since Last Earnings Report: Can It Continue?
It has been about a month since the last earnings report for Oshkosh (OSK - Free Report) . Shares have added about 2.6% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Oshkosh due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Oshkosh's Q2 Earnings Top Mark, Up Y/Y
Oshkosh reported second-quarter fiscal 2021 (ended Mar 31, 2021) adjusted earnings of $1.48 per share, up from $1.25 recorded in the year-ago period. Moreover, fiscal second-quarter earnings surpassed the Zacks Consensus Estimate of $1.15. This outperformance primarily stemmed from higher-than-anticipated revenues and operating income from the Access Equipment and Fire & Emergency segments of the company.
For the reported quarter, consolidated net sales edged up 5.1% from the prior-year period to $1,889 million. The top line also surpassed the Zacks Consensus Estimate of $1,755 million.
For the fiscal second quarter, consolidated operating income rose 5.4%, year over year to $140.8 million (accounting for 7.5% of sales).
Segmental Details
For the March-end quarter, net sales in Access Equipment grew 6.5% year over year to $738.2 million on improved market demand in North America and Asia. The metric also topped the consensus estimate of $639 million. Operating income surged 13.7% from the prior-year quarter to $80.5 million (10.9% of sales) and surpassed the consensus mark of $58 million. This upside primarily resulted from higher sales volumes and revenues, improved product mix as well as lower spending.
The Defense segment’s net sales slipped 2.6% year on year to $614.7 million for the fiscal second quarter owing to lower volumes. The sales figure, however, surpassed the consensus mark of $600 million. Operating income dipped 40.5% from the prior-year figure to $35.5 million (5.8% of sales). The decline chiefly resulted from a decrease in the cumulative catch-up adjustment on contract margins and higher new product development spending.
Net sales in the Fire & Emergency segment totaled $312.5 million, outpacing the Zacks Consensus Estimate of $275 million. The reported figure also increased 29% 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, higher sales volume and reduced spending as a result of the pandemic boosted the segment’s operating income by 149.5% year on year to $47.4 million (15.2% of sales). The metric also topped the consensus mark of $30.98 million.
Net sales in the Commercial segment inched down 2.8% from the year-ago figure to $230 million for the fiscal second quarter on lower refuse collection vehicle demand amid the coronavirus pandemic and negative impact of the sale of the concrete batch plant business in fourth-quarter fiscal 2020. The segment’s operating income, however, jumped 132.1% from the prior-year period to $18.8 million (8.2% of sales), chiefly due to lower warranty costs, reduced spending and low product liability costs.
Financials & Dividend
Oshkosh had cash and cash equivalents of $1,093.2 million as of Mar 31, 2021. The company recorded a long-term debt of $818.3 million as of Mar 31, 2021. Net cash provided by operating activities for the three-month period ended Mar 31, 2021 was $326.8 million.
Oshkosh’s board announced a quarterly cash dividend of 33 cents per share for shareholders. The dividend amount will be paid on May 28 to shareholders of record as of May 14, 2021.
FY21 View
The company expects fiscal 2021 adjusted EPS in the band of $6.35-$6.85 per share. Revenues are forecast in the range of $7.75-$7.95 billion. Adjusted operating income is envisioned between $610 million and $655 million.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month. The consensus estimate has shifted 17.4% due to these changes.
VGM Scores
Currently, Oshkosh has a strong Growth Score of A, a grade with the same score on the momentum front. Following the exact same course, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Oshkosh has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.