OSHKOSH CORP (OSK)·Q2 2025 Earnings Summary

Executive Summary

• Q2 2025 delivered a beat-and-raise: adjusted EPS $3.41 versus S&P Global consensus $2.95*, and revenue $2.73B versus $2.66B*, on resilient margins and strong Vocational execution .
• Access remained profitable at mid-teens margins despite lower volume and discounts; Vocational expanded margins on price/cost and backlog execution; Transport improved margin on FHTV pricing and NGDV ramp .
• 2025 guidance raised/affirmed to GAAP EPS ~$10.25 and adjusted EPS ~$11.00 with net sales ~$10.6B; free cash flow guide increased to $400–$500MM (from $300–$400MM) as tariff impacts are expected to be offset by cost actions .
• Strategic catalysts: three-year FMTV A2 extension with LVAD variants, NGDV fleet milestones, targeted buyback acceleration, and focused tariff mitigation/local-for-local supply actions .

What Went Well and What Went Wrong

What Went Well

• Vocational margin expansion: adjusted operating margin 16.3% on $969.7MM sales (+220 bps YoY), driven by price/cost and backlog execution .
• Transport margin improved to 3.7% (vs 2.1% LY) on better FHTV pricing, lower catch-ups, and mix; NGDV ramp increased delivery vehicle mix to 22% of Transport .
• Management reaffirmed confidence in offsetting tariffs and raised adjusted EPS to ~$11.00; CEO: “We are raising our full-year expectations for adjusted earnings per share to be approximately $11.00” .

What Went Wrong

• Access sales down 10.7% to $1.26B on CAT telehandler license expiration, Europe softness, and higher discounts; adjusted margin compressed to 14.8% (from 17.7%) .
• Tariffs remain a headwind; Q&A indicated 4Q will see more cost impact, requiring mitigation actions and pricing cadence to offset .
• Deferred NGDV contract costs exceed profits on existing orders by ~$180MM at 6/30/25, highlighting profitability risk if USPS volumes/mix differ from expectations .

Financial Results

Consolidated Results (oldest → newest)

Actual vs S&P Global Consensus

Segment Net Sales ($USD Millions)

Segment Operating Income ($USD Millions)

KPIs and Balance Items

Note: “Defense” segment referred to as “Transport” beginning in 2025; Pratt Miller moved to Corporate & other in 2024 and recast historically .

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• CEO: “We delivered a strong second quarter, with adjusted earnings per share of $3.41, up 2.1 percent from the prior year… Our Vocational segment continued to perform well, and our Access segment remained resilient…” .
• CFO on tariffs: “We expect a more limited impact from tariffs… After incorporating cost actions… we project the impact of tariffs to be fully offset and expect our adjusted EPS… ~$11 per share” .
• CEO on Transport: “We would expect steady improvement as we roll on to new contracts… start building on [FMTV] in 2026… second half performance… will improve” .
• CFO on buybacks/FCF: “We are increasing our outlook for free cash flow… to $400–$500 million… we fully expect to materially increase the pace of our share buybacks” .
• CEO on Vocational: “We’re progressively working through ramping up our capacity… pricing in the backlog… volume growth over the second half driving improvements” .

Q&A Highlights

• Access margins and pricing cadence: discounts ~2–3%, normal seasonality (strong Q3, softer Q4); price realization and tariff cost timing skew to 4Q .
• Vocational margin durability: backlog pricing supports 2H margin uplift; capacity ramp the key driver over next 2–3 years .
• Transport cadence: sequential revenue/margin improvement expected on NGDV ramp and FHTV pricing; FMTV A2 extension adds medium-term visibility .
• Tariff mitigation: local-for-local production, supplier renegotiation/resourcing, onshoring where needed; framework stabilization with major trading partners .
• Capital returns: buybacks to roughly double YoY despite share price strength; FCF guide increased, aided by tax law changes .

Estimates Context

• Q2 2025: Adjusted EPS $3.41 versus consensus $2.95*; revenue $2.73B versus consensus $2.66B* — broad-based outperformance; Access and Vocational drove margin resilience .
• Q1 2025: Adjusted EPS $1.92 versus consensus $2.04*, revenue $2.31B versus $2.41B* — Access volume decline and tariff setup weighed on results .
• Q4 2024: Adjusted EPS $2.58 versus consensus $2.18*; revenue $2.60B versus $2.42B* — strong Vocational growth and price/cost .
  Values retrieved from S&P Global.*

Implications: Consensus likely revises higher for Vocational and Transport margins and FY adjusted EPS (~$11.00 maintained), while Access 2H margin expectations may temper given discounting and tariff timing .

Key Takeaways for Investors

• Quarter quality: a clean beat with margins intact despite lower revenue; Vocational is the earnings engine and Transport’s margin recovery is underway .
• Guidance credibility: adjusted EPS ~$11.00 looks achievable with tariff offsets; free cash flow raised to $400–$500MM supports buybacks .
• Access watchpoints: discounts and Europe softness cap upside; expect normal seasonality with 4Q bearing more tariff cost impact .
• Transport visibility: FHTV pricing/mix and NGDV ramp improve margin; FMTV A2 extension adds medium-term order runway .
• Backlog mix: Access backlog down materially (normalizing), but Vocational/Transport backlogs remain robust, underpinning 2H and 2026 revenue .
• Capital allocation: accelerated buybacks in 2H alongside dividend provide support; balance sheet and cash generation give flexibility .
• Risk monitor: tariff rate changes, NGDV profitability vs deferred costs (~$180MM above profits on existing orders), and Access European demand are key variables .

Appendix: Prior Two Quarters Reference

• Q1 2025 highlights: Sales $2.31B, adjusted EPS $1.92, adjusted op margin 8.3%; Access down 22.7%, Vocational up 12.2% with 14.9% adjusted margin; tariff headwind quantified at up to ~$1.00 EPS with ~$0.50 offset .
• Q4 2024 highlights: Sales $2.62B, adjusted EPS $2.58; Vocational revenue +19.8% with 14.0% adjusted margin; initial FY25 guide adj EPS ~$11.00 .