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Oshkosh (OSK) Surpasses Q1 Earnings & Revenue Estimates

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Shares of Oshkosh Corporation (OSK - Free Report) have gained roughly 2.6% in a day’s trading, following the first-quarter fiscal 2019 (Dec 31, 2018) earnings release. During the quarter under review, the company recorded adjusted earnings of $1.61 per share, beating the Zacks Consensus Estimate of 94 cents. In the year-ago quarter, adjusted earnings were 84 cents. Excluding tax benefits, the adjusted net income was $116 million compared with $64 million in the year-ago quarter.

In the reported quarter, consolidated net sales rose 13.7% to $1.8 billion. The figure beat the Zacks Consensus Estimate of $1.66 billion. The rise in sales was due to increased sales in access equipment, and fire & emergency segments, partly offset by lower sales in the defense commercial segments.

During the first quarter of fiscal 2019, consolidated operating income augmented to $160.5 million (8.9% of sales) compared with $74.5 million (4.7% of sales).

Oshkosh Corporation Price, Consensus and EPS Surprise

 

Segmental Details

Net sales for Access equipment increased 31.6% year over year to $826.5 million, driven by an improved demand for telehandlers in North America, favorable business conditions and enhanced production rates as the access equipment segment. In the quarter under review, operating income was $66.4 million (8% of sales).

Defense segment’s net sales decreased 6% to $464.1 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 8.1% to $71.1 million (15.3% of sales).

Net sales for the Fire & Emergency segment rose 29% to $295.5 million. The rise was driven by timing of deliveries. Operating income increased 57.7% to $39.9 million (13.5% of sales).

Net sales for the Commercial segment decreased 8% to $222.2 million due to lower mix of package sales. The segment’s operating income increased to $18.7 million (8.4% of sales).

Financial Details

Oshkosh had cash and cash equivalents of $159.9 million as of Dec 31, 2018, compared with $454.6 million as of Sep 30, 2018. The company’s long-term debt was $818 million in the first quarter of fiscal 2019, similar to the figure recorded at the end of fiscal 2018.

For the reported quarter, Oshkosh’s net cash used by operating activities was $85.9 million compared with a cash inflow of $29.2 million a year ago.

Share Buyback Update

During the quarter ended on Dec 31, 2018, the company bought shares for $170 million and completed repurchasing 2,563,087 units of common stock.

Dividend Announcement

Oshkosh’s board declared a quarterly cash dividend of 27 cents per share to shareholders. The amount will be paid on Mar 1 to shareholders as of Feb 15, 2019.

Fiscal 2019 Outlook

For fiscal 2019, the company anticipates consolidated sales of $8.05-$8.25 billion, marking an increase from the previously stated figure of $7.85-$8.15 billion. Further, diluted earnings per share are projected to be $7.00-$7.50 against the prior guidance of $6.50-$7.25.

Zacks Rank & Stocks to Consider

Oshkosh currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader auto sector are AB Volvo (VLVLY - Free Report) , Cooper Tire & Rubber Company and Honda Motor Co., Ltd. (HMC - Free Report) . Volvo and Cooper Tire currently carry a Zacks Rank #2 (Buy) while Honda sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Volvo has an expected long-term growth rate of 15%. Share price of the company has increased 8.6% in the past month.

Cooper Tire has an expected long-term growth rate of 4%. Over the past month, shares of the company have gained 6.3%.

Honda has an expected long-term growth rate of 2.9%. Shares of the company have gained 13.5% in the past month.

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