Oshkosh Boosts 2013 Earnings Guidance, Shares Rally Almost 19% (OSK)
Shares of Oshkosh Corporation (NYSE: OSK) rallied on Friday after specialty vehicle maker boosted its outlook on full-year earnings and handed out robust first-quarter results, thanks to strong revenue growth in its access equipment business, which include bottom lifts and aerial work platforms offsetting weakness in defense equipment segment.
For the fiscal 2013 ending September, the company expects adjusted earnings (non-GAAP) to be in the range of $2.80 to $3.05 a share, citing improved housing and construction market which would spur up the demand for construction equipments.
“We are in very good shape through most of fiscal 2014 from a domestic sales outlook standpoint … but the concerns are still there, they are valid,” Chief Executive Charles Szews while addressing analysts and investors in a conference call.
In the fiscal first quarter ended December 31, Oshkosh reported earnings of $46.2 million or 51 cents a share compared to profit of $38.9 million or 43 cents a share, in the year earlier quarter.
After excluding onetime expenses, earnings came in at 60 cents a share.
Consolidated sales during the period fell 6% to $1.76 billion.
While revenue from access equipments segment climbed more than 15% during the quarter, revenue from defense segment—which is Oshkosh biggest revenue generator, plunged 21% in the same period. However, operating margins of 7.5% in the defense segment beat analysts’ forecast.
“What was surprising was that profitability in the defense business was probably twice what we expected,” Longbow Research analyst Eli Lustgarten said, according to Thomson Reuters.
The company said that solid demand from construction industry in North America, healthier margins and better aftermarket sales helped driving up the revenue in access equipment segment. Access equipment business accounts for nearly 33% of company’s entire revenue. The Company said that during the quarter, it received record second-biggest number of orders.
As the threat of sequestration looms over the U.S. economy which would substantially reduce the federal government’s spending on defense areas, the Company has now started to lower its dependence on the defense segment.
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Post Written By: Ed Liston
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.
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