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Oshkosh (OSK) Up 4.7% Since Last Earnings Report: Can It Continue?

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A month has gone by since the last earnings report for Oshkosh (OSK - Free Report) . Shares have added about 4.7% 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 catalysts.

Oshkosh Tops Q4 Earnings Estimates, Issues '19 View

Oshkosh’s fourth-quarter fiscal 2018 adjusted earnings were $1.78 per share, beating the Zacks Consensus Estimate of $1.45. In the year-ago quarter, adjusted earnings were $1.38. Net income was 151.3 million compared with $93.5 million in fourth-quarter fiscal 2017.

At the 2018 fiscal end, Oshkosh generated net sales of $7.7 billion while adjusted earnings were $6.36 per share.

In the reported quarter, net sales rose 4.8% to $2.06 billion from $1.96 billion a year ago. The figure was almost in line with the Zacks Consensus Estimate of $2 billion. The rise in sales was primarily due to an increased demand for access equipment, partly offset by lower-than-anticipated sales in the defense segment.

During the fourth quarter of fiscal 2018, consolidated operating income increased 49.7% to $201.4 million (9.8% of sales) compared with $134.5 million (6.9% of sales).

Segmental Details

Net sales for Access equipment increased 27.2% to $1.1 billion, driven by an enhanced demand for both aerial work platforms and telehandlers. Operating income increased to $127 million (12% of sales). The rise was due to higher sales volume, improved price realization and lower restructuring-related expenses.

Defense segment’s net sales decreased 22.2% to $464.6 million due to the absence of international Mine Resistant Ambush Protected-All Terrain Vehicle (M-ATV) sales, partly offset by increased sales to the U.S. government. Operating income decreased 14.5% to $62.4 million (13.4% of sales).

Net sales for the Fire & Emergency segment rose 2.1% to $284 million. The rise was driven by improved pricing. Operating income increased 14.7% to $40 million (14% of sales) due to increased pricing and positive extended warranty experience, partly offset by higher material expenses.

Net sales for the Commercial segment decreased 2.2% to $254 million. The sales figure was impacted by lower package sales. Operating income increased 52.6% to $18 million (7% of sales).

Financial Details

Oshkosh had cash and cash equivalents of $454.6 million as of Sep 30, 2018, compared with $447 million as of Sep 30, 2017. The company’s long-term debt was $818 million at the end of fiscal 2018 compared with $808 million recorded on the prior fiscal.

For the fiscal ended on Sep 30, 2018, Oshkosh’s net cash provided by operating activities was $436.3 million compared with $246.5 million a year ago.

Share Buyback Update

During the reported quarter, the company bought back shares for $82.5 million and completed repurchasing 1,162,733 units of common stock.

Dividend Announcement

Oshkosh’s board declared a quarterly cash dividend of 27 cents per share to its shareholders. The cash dividend has been increased 12.5% from the earlier payout of 24 cents. The amount will be paid on Dec 3 to shareholders as of Nov 19, 2018.

Fiscal 2019 Outlook

For fiscal 2019, the company anticipates consolidated sales of $7.85-$8.15 billion. Further, adjusted diluted earnings per share are projected to be $6.50-$7.25 while operating income is expected to be between $640 million and $710 million.

How Have Estimates Been Moving Since Then?

Fresh estimates followed an upward path over the past two months. The consensus estimate has shifted 19.99% due to these changes.

VGM Scores

At this time, Oshkosh has an average Growth Score of C, a grade with the same score on the momentum front. However, 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

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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