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Oshkosh (OSK) Beats Q2 Earnings Estimates, Raises FY19 View

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Oshkosh Corporation (OSK - Free Report) recorded earnings of $1.82 per share in the second quarter of fiscal 2019 (Mar 31, 2019), beating the Zacks Consensus Estimate of $1.62. In the year-ago quarter, earnings were $1.47 per share. Net income was $128.5 million compared with $110.8 million in the year-ago quarter.

In the reported quarter, consolidated net sales rose 5.5% to $1.99 billion. The figure surpassed the Zacks Consensus Estimate of $1.96 billion. This rise in sales was due to increased sales in higher access equipment, defense, and fire & emergency segments.

In the second quarter of fiscal 2019, consolidated operating income augmented 12.3% year over to $175.6 million (8.8% of sales).

Oshkosh Corporation Price, Consensus and EPS Surprise

 

Segmental Details

Net sales for Access equipment increased 6.4% year over year to $988 million, driven by rise in sales volume and higher pricing. In the quarter under review, operating income was $119.8 million (12.1% of sales).

The Defense segment’s net sales increased 13.7% to $486.7 million, owing to improved sales to the U.S. government. Operating income rose 7.9% to $52.2 million (10.7% of sales).

Net sales for the Fire & Emergency segment rose 3.7% to $283.2 million. This rise was driven by sales of higher content units and improved pricing. Operating income increased 1.7% to $36.6 million (12.9% of sales).

Net sales for the Commercial segment decreased 9.9% to $238 million on lower deliveries, impacted by the winter weather. The segment’s operating income decreased to $7.8 million (3.3% of sales) from $16.4 million (6.2% of sales) recorded in the year-ago quarter.

Financial Details

Oshkosh had cash and cash equivalents of $322 million as of Mar 31, 2019, compared with $454.6 million as of Sep 30, 2018. The company’s long-term debt was $818.5 million in the second quarter of fiscal 2019, similar to the figure recorded at the end of fiscal 2018.

In the first six months of fiscal 2019, Oshkosh’s net cash used by operating activities was $153 million compared with a cash inflow of $44 million a year ago.

Share Buyback Update

During the quarter ended on Mar 31, 2019, the company bought back shares for $25 million and completed repurchasing 313,626 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 May 30 to shareholders as of May 16, 2019.

Fiscal 2019 Outlook

For fiscal 2019, the company anticipates consolidated sales of $8.2-$8.3 billion, marking an increase from the previously stated $8.05-$8.25 billion. Further, diluted earnings per share are projected to be $7.50-$7.80 against $7.00-$7.50 mentioned earlier.

Zacks Rank & Other Stocks to Consider

Oshkosh currently carries a Zacks Rank #2 (Buy). A other few top-ranked stocks in the auto space are PACCAR, Inc. (PCAR - Free Report) , Allison Transmission Holdings, Inc. (ALSN - Free Report) and Ford Motor Company (F - Free Report) , each currently carrying a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

PACCAR has an expected long-term growth rate of 8.4%. The company’s stock has seen the Zacks Consensus Estimate for earnings in 2019 being revised 3.3% upward over the past 30 days.

Allison Transmission has an expected current-year growth rate of 10%. The company’s stock has seen the Zacks Consensus Estimate for earnings in 2019 being revised 2.4% upward over the past 30 days.

Ford has an expected long-term growth rate of 8.1%. The company’s stock has seen the Zacks Consensus Estimate for earnings in 2019 being revised 11.6% upward over the past 30 days.

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