Oshkosh Corp
Q2 2023 Earnings
Did OSK Beat Earnings? Q2 2023 Results
Oshkosh Corporation delivered a blowout second quarter for fiscal 2023, posting adjusted EPS of $2.69 against a consensus estimate of $1.62, a beat of 66.05%, while revenue of $2.41 billion topped expectations by 7.62% and climbed 16.8% from the year-ago period. The standout driver was the Access segment, where sales surged 35.9% to $1.33 billion and operating income nearly tripled to $211.70 million, pushing the segment's operating margin to 15.9% from just 7.4% a year earlier, as higher volume, improved pricing, and the Hinowa acquisition all contributed. The Defense segment remained a soft spot, with sales slipping 7.6% to $498.10 million on lower JLTV program volume, though thin margins held at 1.3%. Confidence in the recovery was underscored by a recent $201 million U.S. Army order for additional medium tactical vehicles, adding to a consolidated backlog of roughly $14.97 billion. Management responded to the momentum by sharply raising its fiscal 2023 outlook, now guiding for net sales of approximately $9.50 billion and adjusted EPS of $8.00, both well above prior targets.
- Improved pricing in response to higher input costs across Access and Vocational segments
- Higher sales volume, primarily in the Access segment
- Favorable sales mix improvements
- Supply chain improvements through component redesign, resourcing, and dual sourcing
- Operational improvements enhancing resiliency
- Lower unfavorable cumulative catch-up adjustments in Defense
- Lower effective tax rate of 24.3% versus 31.2% in the prior year quarter
“We are pleased with our strong financial performance in the quarter, highlighted by significant growth in sales and operating income. Our performance led to adjusted earnings per share of $2.69, which was ahead of our expectations. In particular, our Access and Vocational segments both delivered double-digit operating margins in an environment where supply chains have improved but have not yet returned to historical norms. Our results demonstrate that our actions over the past several quarters to redesign, resource and dual source components as well as implement numerous operational improvements are enhancing our resiliency in a constrained supply chain environment.”
Oshkosh CEO, on the earnings call
Forward Guidance & Outlook
Oshkosh raised its fiscal 2023 guidance significantly. The company now expects diluted EPS of $7.65 (up from $5.75) and adjusted EPS of $8.00 (up from $6.00) on projected net sales of approximately $9.5 billion (up from $8.65 billion). The sales guidance includes approximately $300 million from the acquired AeroTech business. The AeroTech acquisition is not expected to materially impact operating income in fiscal 2023 due to initial purchase accounting and deal amortization. The company's $15 billion backlog provides visibility well into 2024.
OSK YoY Financials
OSK Revenue by Segment
Figures from SEC filings and company reports. Not investment advice.