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OC

OSHKOSH CORP (OSK)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 was mixed: consolidated sales fell 9.1% to $2.31B and adjusted EPS was $1.92, below consensus, driven by Access softness and defense catch-up adjustments; Vocational delivered strong margin expansion and backlog growth .
  • Versus estimates, OSK missed on revenue ($2.31B vs $2.41B*) and adjusted EPS ($1.92 vs $2.04*); Q4 2024 was a clear beat and Q3 2024 modestly beat both metrics (see table) .
  • Management maintained confidence in the FY25 adjusted EPS trajectory of ~$11.00 absent tariffs but introduced a $1.00 per-share tariff headwind with up to $0.50 offset via cost actions; no formal guidance reset was issued .
  • Key catalysts: tariff mitigation progress and clarity on Access pricing, continued strength in Vocational, and NGDV ramp to full-rate production by year-end; Investor Day (June 5) should update strategy and FY outlook .

What Went Well and What Went Wrong

What Went Well

  • Vocational strength: revenue +12.2% YoY to $0.87B and operating margin expanded to 13.6% (adjusted 14.9%) on improved price/cost and higher refuse volume .
  • Access resilience: despite sales down 22.7% YoY, adjusted operating margin held at 11.3%; management cited strong backlog ($1.80B) and book-to-bill 1.0 .
  • NGDV ramp: USPS deliveries started; management reaffirmed plan to reach full-rate production (16k–20k units annualized) by year-end, supporting H2 revenue and margin cadence .

Selected quotes:

  • “Adjusted EPS of $1.92 was in line with our expectations of approximately $2.00 per share.” — CEO John Pfeifer .
  • “We are on target to increase NGDV volume to full rate production by year-end.” — CFO Matt Field .

What Went Wrong

  • Access volume/mix pressure: North America softness and higher sales discounts led to segment sales -22.7% and margin compression (10.8% GAAP OPM vs 16.8% prior year) .
  • Defense segment breakeven: operating income fell to $0.6M (0.1% margin) on lower JLTV volumes and unfavorable cumulative catch-up adjustments (CCAs) .
  • Tariff headwinds: company now expects ~$1.00 EPS headwind (direct), mostly impacting Access; cost actions may offset up to $0.50, but timing is back-half loaded and uncertain .

Financial Results

Consolidated Performance vs Prior Periods

MetricQ3 2024Q4 2024Q1 2025
Revenue ($USD Billions)$2.741 $2.623 $2.313
GAAP EPS ($)$2.75 $2.33 $1.72
Adjusted EPS ($)$2.93 $2.58 $1.92
Operating Income ($USD Millions)$266.2 $223.9 $175.4
Operating Margin (%)9.7% 8.5% 7.6%
Adjusted Operating Margin (%)10.3% 9.4% 8.3%

Consensus vs Actuals (S&P Global vs Company-Reported)

MetricQ3 2024 Estimate*Q3 2024 ActualQ4 2024 Estimate*Q4 2024 ActualQ1 2025 Estimate*Q1 2025 Actual
Revenue ($USD Billions)$2.666*$2.741 $2.418*$2.623 $2.406*$2.313
Adjusted EPS ($)$2.91*$2.93 $2.18*$2.58 $2.04*$1.92

Values with asterisk retrieved from S&P Global.

Segment Breakdown — Q1 2025 vs Q1 2024

SegmentSales Q1 2024 ($MM)Sales Q1 2025 ($MM)YoYOp Inc Q1 2024 ($MM)Op Inc Q1 2025 ($MM)OPM Q1 2025
Access$1,237.5 $957.1 -22.7% $208.1 $103.1 10.8%
Vocational$772.4 $866.8 +12.2% $80.1 $117.8 13.6%
Defense$509.1 $463.0 -9.1% $13.3 $0.6 0.1%
Corporate & Other$24.8 $25.9 +4.4% -$41.8 -$46.1 n/a

Adjusted Operating Income (Q1 2025): Access $107.8 (11.3%), Vocational $128.8 (14.9%), Consolidated $191.8 (8.3%) .

KPIs and Operating Metrics

KPIQ3 2024Q4 2024Q1 2025
Backlog – Access ($MM)$2,132.9 $1,832.2 $1,804.8
Backlog – Vocational ($MM)$5,911.9 $6,318.1 $6,340.1
Backlog – Defense ($MM)$6,212.0 $6,040.7 $6,400.6
NGDV – Delivery Vehicles Sales ($MM)$32.4 $35.0 $50.3
Cash from Operations ($MM)(240.7) (9M’24) $550.1 (FY’24) (394.9)
Share Repurchases100,212 shares, $11.0MM (Q3’24) 494,069 shares, $50.4MM (Q4’24) 287,552 shares, $28.7MM
Dividend per Share ($)$0.46 (declared) $0.51 (declared) $0.51 (declared)

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Adjusted EPSFY 2025~$11.00 ~$11.00 absent tariffs; direct tariff impact ~$1.00/share; cost actions up to $0.50/share Maintained underlying, introduced tariff headwind/partial offset
GAAP EPSFY 2025~$10.30 No formal update in Q1 release Maintained
NGDV Volume2025 exit run-rateLow-rate start (Q3’24) Full-rate by year-end (16k–20k units annualized) Raised cadence clarity
DividendQ1 2025$0.51 (Q4’24 announced) $0.51 payable May 30, 2025 Maintained

Earnings Call Themes & Trends

TopicQ-2 (Q3 2024)Q-1 (Q4 2024)Current (Q1 2025)Trend
Access Demand & PricingSoftness in North America; reduced 2024 EPS outlook Moderating demand; margin still double-digit Resilient margins; higher discounts; backlog $1.80B; book-to-bill 1.0 Stable-to-soft; resilient margins
Tariffs/MacroEU tariffs noted risk to Access General tariff risk disclosure ~$1.00 EPS headwind; offset up to $0.50; mostly Access; back-half weighted New negative headwind
NGDV (USPS)Low-rate production begun Ramp in 2025; positive carrier feedback Full-rate by year-end; Defense margin to improve sequentially Positive ramp
Defense ProgramsJLTV wind-down expected; international orders anticipated JLTV impact to margins; CCAs pressure CCAs on JLTV/FMTV; Netherlands DX-PV order; FHTV V $95MM Mixed near-term; improving int’l
VocationalAeroTech contribution; strong price/cost Significant margin improvement Refuse strength; capacity investments; pricing still in backlog Strong and improving

Management Commentary

  • “We are closely monitoring the international trade environment… we estimate that the direct adverse impact of tariffs… could be in the range of $1.00 per share for 2025. We anticipate that company-wide cost reduction actions will partially offset the impact… by up to $0.50 per share.” — CEO John Pfeifer .
  • “We did not experience any notable order cancellations… Access backlog remains strong… we booked orders of $930 million and achieved a book-to-bill ratio of 1.0.” — CEO John Pfeifer .
  • “We are on target to increase NGDV volume to full rate production by year-end… margins in defense should ramp up sequentially.” — CFO Matt Field .
  • “We have pricing power… but our MO is to minimize impact to customers… tariffs are targeted and we are laser-focused on mitigation.” — CEO John Pfeifer .

Q&A Highlights

  • Tariff impact and mitigation: ~$1.00 EPS headwind mostly in Access; offsets up to $0.50 via broad cost actions; limited Q2 impact as inventories work through; customer pricing power used judiciously to avoid demand elasticity .
  • Defense cadence: NGDV ramp linear through year; exit at full-rate run-rate (16k–20k units); defense margins to improve sequentially; Q1 breakeven doesn’t change full-year view .
  • Access outlook: telehandler decline includes loss of Cat license; management emphasized share gains and resilient margins; customer sentiment balanced with no defleeting; backlog supports H1 softness then better H2 .
  • Vocational trajectory: refuse/recycling strength driven by manufacturing investments and dealer network expansion; considerable pricing in backlog to monetize as capacity increases .

Estimates Context

  • Q1 2025 missed consensus: revenue $2.31B vs $2.41B* and adjusted EPS $1.92 vs $2.04*; driven by Access volume/mix and defense CCAs (see tables) .
  • Prior quarters: Q4 2024 was a notable beat on revenue and adjusted EPS vs consensus; Q3 2024 modestly beat both (see tables) .
  • FY 2025: Street adjusted EPS ~10.88* and revenue ~$10.33B*; management reiterated underlying ~$11.00 absent tariffs; expect back-half tariff impact and mitigation .

Values with asterisk retrieved from S&P Global.

Key Takeaways for Investors

  • Backdrop: Access remains soft near term but margins are resilient; Vocational strength and backlog provide multi-quarter visibility; Defense ramps with NGDV in H2, reducing program risk .
  • Watch tariffs: Expect back-half EPS drag (~$1.00) largely in Access with up to $0.50 offset; monitor mitigation (resourcing, negotiation) and any pricing actions that could pressure volumes .
  • Segment mix supports margins: Vocational and NGDV ramp should offset Access softness over H2, aiding consolidated margins and cash conversion as inventories normalize .
  • Backlog quality: Access $1.80B and Vocational $6.34B backlogs, with pricing embedded; conversion pace depends on capacity and order cadence, not cancellations .
  • Near-term trading: Expect estimate revisions lower for Access due to tariffs; setups for positive surprises include faster NGDV ramp, stronger Vocational throughput, and clearer tariff mitigation at Investor Day .
  • Medium-term thesis: Leading positions, pricing power and disciplined capital allocation (buybacks, dividend) underpin earnings durability; focus on execution in Access and Defense CCAs normalization .