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Oshkosh (OSK) Q3 Earnings & Revenues Beat Estimates, Up Y/Y

Zacks Equity Research

Oshkosh Corporation OSK recorded earnings of $2.72 per share in the third quarter of fiscal 2019 (Jun 30, 2019). The figure beat the Zacks Consensus Estimate of $2.41. In the year-ago quarter, earnings were $2.20 per share. Net income was $191.9 million compared with $153.4 million in the year-ago quarter.

In the reported quarter, consolidated net sales rose 10% to $2.39 billion. The figure surpassed the Zacks Consensus Estimate of $2.30 billion. This upside can be attributed to higher sales in all the segments.

In the third quarter of fiscal 2019, consolidated operating income augmented 15.5% year over to $257.8 million (10.8% of sales).

Segmental Details

Net sales in the Access equipment increased 7.7% year over year to $1.25 billion, driven by rise in sales volume and higher pricing. In the quarter under review, operating income increased 27.2% to $189.9 million (15.2% of sales).

The Defense segment’s net sales increased 15.5% to $511.1 million, owing to higher sales to the U.S. government. Operating income fell 38.8% to $29.5 million (5.8% of sales).

Net sales in the Fire & Emergency segment rose 20.2% to $341 million. The upside was driven by sales of higher content units, application of new revenue recognition standard and improved pricing. Operating income increased 38.9% to $50.7 million (14.9% of sales).

Net sales in the Commercial segment inched up 0.3% to $296 million on the application of the new revenue recognition standard. The segment’s operating income declined to $21.5 million (7.3% of sales) from $25.1 million (8.5% of sales) in the year-ago quarter.

Financial Details

Oshkosh had cash and cash equivalents of $152.2 million as of Jun 30, 2019 compared with $454.6 million as of Sep 30, 2018. The company’s long-term debt was $818.7 million in the third quarter of fiscal 2019, similar to the figure recorded at the end of fiscal 2018.

In the first nine months of fiscal 2019, Oshkosh’s net cash provided by operating activities was $105.8 million compared with $220.2 million in the year-ago period.

Share Buyback Update

During the quarter ended on Jun 30, the company repurchased 1,166,914 shares of common stock for $88.9 million.

On May 7, 2019, the Board of Directors increased the company’s remaining common stock repurchase authorization to 10 million shares.

Dividend Announcement

Oshkosh’s board declared a quarterly cash dividend of 27 cents per share to shareholders. The amount will be paid on Sep 3 to shareholders as of Aug 19, 2019.
 

Oshkosh Corporation Price, Consensus and EPS Surprise

 

Oshkosh Corporation Price, Consensus and EPS Surprise

Oshkosh Corporation price-consensus-eps-surprise-chart | Oshkosh Corporation Quote

 

Fiscal 2019 Outlook

For fiscal 2019, the company anticipates consolidated operating income in the range of $760-$775 million, up from the previously stated view of $725-$755 million. Further, adjusted earnings per share are projected in the band of $7.90-$8.10 compared with $7.50-$7.80 mentioned earlier.

Zacks Rank & Stocks to Consider

Currently, Oshkosh has a Zacks Rank #3 (Hold).

Some better-ranked stocks in the auto space worth considering are Copart, Inc CPRT, CarMax, Inc KMX and Gentex Corporation GNTX. While Copart sports a Zacks Rank #1 (Strong Buy), CarMax and Gentex carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Copart has an expected long-term growth rate of 20%. In the past year, shares of the company have rallied 33.3%.

CarMax has an expected long-term growth rate of 12.6%. In the past year, shares of the company have moved up 17.9%.

Gentex has an expected long-term growth rate of 5%. In the past year, shares of the company have returned 18.7%.

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