Oshkosh Corporation OSK reported its fiscal year 2019 second quarter earnings on April 30, highlighting an increased diluted earnings per share of $1.82, compared to the $1.47 reported in the same quarter in 2018, and a net income of $128.5 million compared to $110.8 million, in 2018.
Oshkosh, a leading specialty truck manufacturer based in Wisconsin, also reported consolidated operating income in the second quarter of fiscal 2019 increased 12.3 percent to $175.6 million, or 8.8 percent of sales, compared to $156.4 million, or 8.3 percent of sales, in the second quarter of fiscal 2018.
"We are pleased to report another quarter of strong performance highlighted by growth in revenue, operating income and earnings per share," Wilson R. Jones, president and chief executive officer of Oshkosh Corporation, said in the release. "This quarter truly exemplifies why we are a different integrated global industrial. Our diverse end-market exposure coupled with our integrated operations and supply chain allowed us to overcome a number of challenges, including a significant weather-related disruption in our commercial segment to deliver higher consolidated year-over-year sales and earnings."
In the release, the company increased earnings expectations for the rest of 2019, based on the company's strong gains in its second quarter.
"As a result of our continued strong execution, healthy backlogs and solid outlook for our markets," Jones said, "we are increasing our expectations for fiscal 2019 earnings per share to be in a range of $7.40 to $7.70 or $7.50 to $7.80 on an adjusted earnings per share basis."
According to the release, the primary factors contributing to the company's success are the access equipment, defense, fire and emergency and commercial segments.
Access Equipment – Access equipment segment net sales in the second quarter of fiscal 2019 increased 6.4 percent to $987.6 million. The increase in sales was due to increased sales volume and higher pricing in response to higher material costs. Sales grew in all regions in the second quarter of fiscal 2019, led by the Pacific Rim.
Access equipment segment operating income in the second quarter of fiscal 2019 increased 22.7 percent to $119.8 million, or 12.1 percent of sales, compared to $97.6 million, or 10.5 percent of sales, in the second quarter of fiscal 2018. The increase in operating income was primarily due to improved pricing, the impact of higher sales volume, the absence of restructuring-related expenses and improved operational efficiencies, including fewer supplier disruptions, offset in part by higher material costs. The second quarter of fiscal 2018 also included a benefit of $7.7 million related to the recognition of deferred margin upon the receipt of cash from a customer on the cost recovery method of accounting.
Access equipment segment results for the second quarter of fiscal 2018 included pre-tax charges and operating inefficiencies associated with restructuring actions of $5.2 million. Excluding these charges and inefficiencies, adjusted operating income in the second quarter of fiscal 2018 was $102.8 million, or 11.1 percent of sales.
Defense – Defense segment net sales for the second quarter of fiscal 2019 increased 13.7 percent to $486.7 million. The increase in sales was due to the continued ramp-up of sales to the U.S. government under the Joint Light Tactical Vehicle program and changes associated with the application of the new revenue recognition standard. Defense segment sales for the second quarter of fiscal 2019 without the adoption of the new revenue recognition standard would have been $472.8 million, an increase of 10.4 percent compared to the second quarter of fiscal 2018.
Defense segment operating income in the second quarter of fiscal 2019 increased 7.9 percent to $52.2 million, or 10.7 percent of sales, compared to $48.4 million, or 11.3 percent of sales, in the second quarter of fiscal 2018. The increase in operating income was due to changes associated with the application of the new revenue recognition standard, including an increase in contract margins on the Family of Heavy Tactical Vehicle program upon the receipt of orders in the second quarter of fiscal 2019, and the impact of higher sales volume, offset in part by an adverse product mix and costs to start-up a manufacturing facility in Tennessee. Defense segment operating income for the second quarter of fiscal 2019 without the adoption of the new revenue recognition standard would have been $44.8 million, or 9.5 percent of sales.
Fire & Emergency – Fire & emergency segment net sales for the second quarter of fiscal 2019 increased 3.7 percent to $283.2 million as a result of the sale of higher content units and improved pricing. Fire & emergency segment sales for the second quarter of fiscal 2019 without the adoption of the new revenue recognition standard would have been $286.1 million, an increase of 4.8 percent compared to the second quarter of fiscal 2018.
Fire & emergency segment operating income in the second quarter of fiscal 2019 increased 1.7 percent to $36.6 million, or 12.9 percent of sales, compared to $36.0 million, or 13.2 percent of sales, in the second quarter of fiscal 2018. Improved pricing in the quarter was almost completely offset by higher material costs. Fire & emergency segment operating income for the second quarter of fiscal 2019 without the adoption of the new revenue recognition standard would have been $38.0 million, or 13.3 percent of sales.
Commercial – Commercial segment net sales for the second quarter of fiscal 2019 decreased 9.9 percent to $237.9 million on lower deliveries as severe winter weather impacted one of its manufacturing facilities, including a partial roof collapse due to extreme snow accumulation. Commercial segment sales for the second quarter of fiscal 2019 without the adoption of the new revenue recognition standard would have been $233.7 million, a decrease of 11.4 percent compared to the second quarter of fiscal 2018.
Commercial segment operating income in the second quarter of fiscal 2019 decreased 52.4 percent to $7.8 million, or 3.3 percent of sales, compared to $16.4 million, or 6.2 percent of sales, in the second quarter of fiscal 2018. The decrease in operating income was largely a result of the impact of the weather-related production disruptions. Excluding restructuring-related charges of $1.8 million in the prior year, adjusted operating income was $18.2 million, or 6.9 percent of sales, in the second quarter of fiscal 2018. Commercial segment operating income for the second quarter of fiscal 2019 without the adoption of the new revenue recognition standard would have been $6.6 million, or 2.8 percent of sales.
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