Yahoo Finance Oshkosh (OSK) Down 13.3% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for Oshkosh (OSK). Shares have lost about 13.3% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Oshkosh due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Oshkosh Reports Q4 Earnings Miss
Oshkosh 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.
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.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
The consensus estimate has shifted -11.85% due to these changes.
VGM Scores
At this time, Oshkosh has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Oshkosh has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.
Performance of an Industry Player
Oshkosh belongs to the Zacks Automotive - Original Equipment industry. Another stock from the same industry, Autoliv, Inc. (ALV), has gained 2.7% over the past month. More than a month has passed since the company reported results for the quarter ended December 2022.
Autoliv, Inc. reported revenues of $2.34 billion in the last reported quarter, representing a year-over-year change of +10.2%. EPS of $1.83 for the same period compares with $1.30 a year ago.
For the current quarter, Autoliv, Inc. is expected to post earnings of $0.80 per share, indicating a change of +77.8% from the year-ago quarter. The Zacks Consensus Estimate has changed -32.6% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Autoliv, Inc. Also, the stock has a VGM Score of A.
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