Oshkosh Corp. (OSK) Prelim. Q4 Results Miss Consensus

(Updated - October 8, 2021 7:03 AM EDT)

Oshkosh Corporation (NYSE: OSK), a leading innovator of mission-critical vehicles and essential equipment, is making two announcements this morning.

Fiscal Year Change

The Company’s Board of Directors approved a change in the Company’s fiscal year to a calendar year beginning on January 1 and ending on December 31, effective for the fiscal year beginning January 1, 2022 (Calendar 2022). Historically, the Company’s fiscal year began on October 1 and ended on September 30. Oshkosh is taking this action to better align the timing of its business planning and reporting activities with those of its customers.

To facilitate the transition to the new fiscal year, the Company will have an abbreviated fiscal year from October 1, 2021 to December 31, 2021 (Stub Period).

Business Update

The Company is also providing an update on current business conditions that impacted the fourth quarter of fiscal 2021 and will likely continue into Calendar 2022.

While Oshkosh is seeing strong growth in demand, the Company is experiencing significant supply chain and logistics disruptions as well as material and freight cost inflation similar to other companies that are beyond the Company’s prior expectations. The unavailability of parts has impacted the Company’s ability to produce and ship units, particularly at Access Equipment, and has also contributed to labor inefficiencies. As a result, Oshkosh now expects to report both revenues and diluted earnings per share (EPS) for the fourth quarter of fiscal 2021 that are lower than what the Company discussed on its fiscal third quarter conference call.

“We implemented multiple price increases in our non-Defense segments over the past six to nine months to combat unprecedented raw material inflation and freight cost escalation,” said John C. Pfeifer, Oshkosh Corporation President and Chief Executive Officer. “Based on current conditions, we expect that our pricing actions will cover our higher input costs. However, due to our backlogs, we do not believe this price catch-up will occur until the end of the second quarter of Calendar 2022. If cost escalation persists, we will take additional pricing actions.”

The Company is in the process of closing its books and compiling its fiscal 2021 financial statements, so final results are not yet available. Preliminarily, the Company expects to report fourth quarter fiscal 2021 revenues of ~$2.05 billion, leading to diluted EPS of approximately $1.10 to $1.15 and adjusted1 diluted EPS of approximately $0.90 to $0.95. The Company expects the current challenges to persist into the Stub Period and expects substantially lower EPS compared to the fourth quarter of fiscal 2021.

(Consensu sees Q4 EPS of $1.81 on revenue of $2.15 billion)

“Despite the near term pressure, we maintain a positive outlook for our businesses as we expect robust customer demand to continue for our Access Equipment, Fire & Emergency and Commercial segments. Additionally, we remain confident in our Defense segment with its strong foundation of current programs complemented by significant recent program wins, including the U.S. Postal Service’s Next Generation Delivery Vehicle and the U.S. Army’s Medium Caliber Weapons System. We are navigating the current environment by taking all appropriate actions within our control, and we remain confident that Oshkosh is well-positioned to drive long-term profitable growth,” added Pfeifer.

More detailed commentary and updates will be provided in the Company’s year-end fiscal 2021 earnings release and conference call to be held on October 28, 2021.

Preliminary Results and Forward-Looking Statements
The preliminary financial results for the fourth quarter of fiscal 2021 represent the most current information available to management and reflect estimates and assumptions. Our actual results may differ materially from these preliminary results due to the completion of our financial closing procedures, final adjustments and other developments that may arise between the date of this release and the time that financial results for the fourth quarter of fiscal 2021 are finalized. The preliminary financial results have not been audited by our independent registered public accounting firm nor has our independent registered public accounting firm performed any procedures with respect to this information or expressed any opinion or any form of assurance regarding such information. These preliminary financial results should not be viewed as a substitute for full financial statements prepared in accordance with U.S. GAAP.

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