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Oshkosh (OSK) Q4 Earnings Miss Estimates Despite Sales Beat

Oshkosh Corporation OSK reported fourth-quarter adjusted earnings of $1.60 per share, missing the Zacks Consensus Estimate of $1.73. The underperformance can be attributed to lower-than-expected earnings across the Access Equipment, Defense and Fire & Emergency segments. The bottom line, however, rocketed 344% from the 36 cents recorded in the year-ago period.

In the quarter under review, consolidated net sales climbed 23% year over year to $2,203.6 million. The top line surpassed the Zacks Consensus Estimate of $2,180 million.

Oshkosh Corporation Price, Consensus and EPS Surprise

 

Oshkosh Corporation Price, Consensus and EPS Surprise
Oshkosh Corporation Price, Consensus and EPS Surprise

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

 

Segmental Details

Access Equipment: The segment’s net sales rose 28.9% year over year to $1,074 million on improved sales volume and higher pricing. The metric crossed the consensus estimate of $1,071 million.

Operating income skyrocketed 203.7% to $116 million (accounting for 10.8% of sales) owing to higher sales volume and higher pricing, offset in part by higher input costs. The metric marginally lagged the Zacks Consensus Estimate of $117 million.

Defense: The segment’s net revenues rose 3% year over year to $547.7 million, led by higher aftermarket parts shipment volume. However, the metric fell short of the Zacks Consensus Estimate of $557 million.

Operating income rose by 24.4% from the prior-year figure to $19.9 million (3.6% of sales), owing to favorable product mix. The metric significantly lagged the Zacks Consensus Estimate of $46.03 million.

Fire & Emergency: The segment’s revenues totaled $300 million, increasing 37.2% year over year, mainly due to higher fire truck deliveries and high prices. The metric also beat the Zacks Consensus Estimate of $291 million.

The segment’s operating income rose 49.1% year over year to $23.7 million (7.9% of sales) due to higher sales volume and higher pricing, which offset escalating input costs. However, the metric missed the Zacks Consensus Estimate of $48.5 million.

Commercial: The segment’s net sales increased by 34.3% from the year-ago figure to $282.9 million on the back of higher RCV volume and higher pricing. Also, the metric beat the Zacks Consensus Estimate of $248 million.

The segment’s operating profit skyrocketed 641.7% to $17.8 million (6.3% of sales), largely due to favorable price/cost dynamics and higher sales volume. The metric also beat the Zacks Consensus Estimate of $14.21 million.

Financials, Dividend

Oshkosh had cash and cash equivalents of $805.9 million as of Dec 31, 2022. The company recorded a long-term debt of $595 million, down from $819 million as of Dec 31, 2021.

Oshkosh declared a quarterly cash dividend of 41 cents per share, representing an 11% hike from the previous payout. The dividend will be paid on Mar 2, 2023, to shareholders on record as of Feb 16, 2023.

2023 Outlook

In light of current supply chain constraints that are expected to improve modestly in 2023, the company estimates its EPS to be around $5.50. This implies an improvement from $3.46/share in 2022. Revenues and operating income in 2023 are anticipated to be $8.4 billion and $530 million, respectively.

Zacks Rank & Key Picks

Oshkosh currently carries a Zacks Rank #3 (Hold).

A few better-ranked players in the auto space include Mercedes-Benz Group AG MBGAF, Wabash National WNC and BMW AG BAMXF. While MBGAF and BAMXF sport a Zacks Rank #1 (Strong Buy), WNC carries a Zack Rank #2 (Buy).

Mercedes-Benz develops, manufactures and sells passenger cars, including premium and luxury vehicles. The Zacks Consensus Estimate for MBGAF’s 2023 sales implies year-over-year growth of 4%.

Wabash is one of the leading manufacturers of semi-trailers in North America. The Zacks Consensus Estimate for WNC’s 2023 sales and earnings implies year-over-year growth of 5.5% and 18.7%, respectively.

BMW is a multi-brand automobile manufacturer that focuses on the premium segments of the worldwide automobile and motorcycle markets. The Zacks Consensus Estimate for BAMXF’s 2023 sales implies year-over-year growth of 3%.

You can see the complete list of today’s Zacks #1 Rank stocks here.

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