Oshkosh Q3 Earnings Call Highlights

Key Points

• Oshkosh cut its 2026 outlook after third-quarter adjusted EPS of $2.41 missed expectations, with fire-truck production disruptions weighing on results. The company now expects adjusted EPS of $8.50–$9.50, approximately $11 billion in revenue and $850 million in adjusted operating income.
• The Vocational segment struggled as its fire-truck manufacturing overhaul caused material-flow and production issues, driving a 20% year-over-year decline in fire-truck shipments and reducing segment operating income. Management expects production to improve sequentially and believes the new lines can support 25%–30% growth through 2028.
• Access remained a key growth area, with sales rising 21%, orders reaching $2 billion and backlog totaling $2.7 billion. Despite operational pressures elsewhere, Oshkosh generated $275 million in third-quarter free cash flow and raised its full-year forecast to $600 million–$700 million.

Oshkosh NYSE: OSK reported third-quarter 2026 sales of $2.8 billion, up 5.7% from a year earlier, while adjusted earnings per share of $2.41 fell short of the company’s expectations as fire truck production challenges weighed on results.

Chief Executive Officer John Pfeifer said the company’s revised full-year outlook primarily reflects near-term disruptions in its effort to modernize fire truck production at its Pierce business. Oshkosh now expects adjusted earnings per share of $8.50 to $9.50 for 2026, compared with its prior outlook, while forecasting approximately $11 billion in revenue and about $850 million in adjusted operating income.

“Our third quarter 2026 consolidated sales of $2.8 billion and adjusted earnings per share of $2.41 fell short of our expectations,” Pfeifer said. He attributed the shortfall to greater-than-anticipated production variability tied to the routing and delivery of thousands of parts used in custom fire trucks.

Fire Truck Manufacturing Overhaul Pressures Vocational Results

Oshkosh is converting portions of its fire truck operations from traditional labor-intensive assembly to higher-flow production lines. The company said the effort is intended to improve output, flexibility and long-term returns while helping deliver trucks to customers more quickly.

However, the transition has created material-flow challenges. Pfeifer said the company is improving tracking for internally fabricated parts, strengthening point-of-use delivery processes and adding experienced manufacturing leadership. The company plans to ramp the new production lines gradually alongside existing final assembly operations to reduce disruptions.

Once the changes are implemented, Oshkosh expects stable fire truck production at roughly 10% above last year’s levels. The company maintained its expectation that high-flow production lines can support 25% to 30% fire truck growth through 2028.

Vocational segment sales totaled $900 million in the third quarter, down $68 million from a year earlier. Fire truck production and shipment volume was approximately 20% below the prior-year quarter and also declined sequentially from the second quarter, according to Chief Financial Officer Matt Field.

Vocational adjusted operating income fell $49 million year over year to $102 million. More than $10 million of the decline was tied to additional spending on production-improvement initiatives. The segment’s adjusted operating margin was 11.4%.

Field said Oshkosh expects sequential production improvement in the fourth quarter as operations stabilize. For the full year, the company forecasts vocational revenue of about $3.7 billion and an adjusted operating margin of 12.5%.

Management also said demand for refuse and recycling vehicles showed early signs of recovery during the quarter as fleets plan for 2027. Oshkosh said its refuse backlog returned to roughly the level of a year earlier after being lower earlier in 2026.

Access Segment Delivers Sales Growth and Strong Orders

Oshkosh’s Access segment reported third-quarter sales of $1.3 billion, up 21% from the prior year, driven by higher North American volume and improved pricing. The segment generated an adjusted operating margin of 11.2%, 20 basis points above the prior-year quarter.

The company recorded $2 billion in access orders during the quarter, producing a book-to-bill ratio of 1.5 and leaving it with a $2.7 billion backlog. Management said demand has been led by national rental companies and supported by large infrastructure investments, data centers and related projects.

Pfeifer said private nonresidential construction activity remained generally stable, while major projects have been the primary market driver. He added that growth in broader private nonresidential activity would be incremental upside to current demand.

Oshkosh expects full-year Access revenue of $4.8 billion and an adjusted operating margin of approximately 9.75%. Field said higher production throughput, improved manufacturing efficiency, more stable tariff conditions and pricing actions should support healthier incremental margins as the market recovers.

During the quarter, Oshkosh also announced a strategic investment in Nextera Robotics. The company said Nextera combines visual artificial intelligence, autonomous robotics and digital mapping to improve job-site visibility, quality and safety, complementing JLG’s connected-equipment and ClearSky Smart Fleet offerings.

Transport Outlook Includes NGDV Timing Uncertainty

Transport segment sales declined 4% to $562 million. The year-earlier period included a $25 million license of JLTV-related intellectual property to the U.S. government that did not recur. Higher production of Next Generation Delivery Vehicles, or NGDVs, for the U.S. Postal Service was offset by lower defense volume.

Transport operating income was $8 million, down $28 million from a year earlier, primarily due to the prior-year intellectual-property licensing benefit.

Oshkosh said NGDV production improved sequentially in the third quarter, though certain suppliers remain production constraints. The company is adding supply buffers and expects those actions to normalize production by the middle of 2027. Management said it expects production to move from the lower end toward the upper end of an annualized range of 16,000 to 20,000 units.

Field said Oshkosh continues to expect a follow-on NGDV order from the Postal Service, although the timing could affect fourth-quarter earnings. The order could add as much as $40 million, or $0.50 per share, in the fourth quarter if received before year-end. The lower end of the company’s updated earnings outlook assumes the order slips into 2027.

For 2026, Oshkosh forecasts Transport revenue of approximately $2.3 billion and an operating margin near 4%.

Cash Flow Remains Strong

Despite the operational pressures, Oshkosh generated $275 million in third-quarter free cash flow, bringing year-to-date free cash flow to $433 million. The company raised its full-year free-cash-flow outlook by $50 million to a range of $600 million to $700 million, citing working-capital discipline, higher customer advances and improved inventory management.

During the quarter, Oshkosh repurchased about 556,000 shares for $82 million. Moody’s also upgraded the company’s credit rating to Baa2, which Field said reflected the company’s resilience and balance-sheet strength.

About Oshkosh (NYSE:OSK)

Oshkosh Corporation NYSE: OSK is a manufacturer of specialty vehicles, vehicle bodies and related equipment for commercial, government and industrial customers. The company serves markets that require purpose-built vehicles designed for demanding operating conditions, including defense, emergency response, construction, aviation support and municipal services.

Oshkosh's product portfolio includes military vehicles and systems, fire apparatus, airport rescue and firefighting vehicles, refuse collection vehicles, concrete mixers, snow and ice removal equipment, and other vocational trucks.

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