Oshkosh Corp (OSK)

Oshkosh Corporation is a global industrial technology company that designs and deploys advanced technologies to empower everyday heroes who build, serve and protect communities around the world. The Company operates across construction, firefighting, aviation, refuse collection, defense and delivery industries, creating purpose-built vehicles, equipment and integrated ecosystems. The Company has three reportable segments: Access, Vocational and Transport, which comprised 43%, 36% and 20%, respectively, of the Company's 2025 consolidated net sales. The Company generated approximately 20% of its net sales in both 2025 and 2024, and 19% in 2023, from sales to the United States government, a substantial majority of which were under multi-year contracts and programs in the defense vehicle market.

The Company maintains leading market shares across nearly all of its businesses and is the sole-source supplier for several key vehicle platforms to the DoD. In the Access segment, JLG's competitors include Genie Industries, Inc., Skyjack Inc., Haulotte Group, Xuzhou Construction Machinery Group Co., Ltd., Zhejiang Dingli Machinery Co., Ltd. and numerous other manufacturers. The principal competitor for Jerr-Dan-branded products is Miller Industries, Inc. In the Vocational segment, competitors for Pierce and Maxi-Metal firefighting vehicles include Rosenbauer International AG, REV Group, Inc. and numerous smaller, regional manufacturers. Competitors in the refuse and recycling collection vehicles market include Environmental Solutions Group, New Way Trucks, Labrie Enviroquip Group and other regional competitors. In the Transport segment, competition for Oshkosh Defense includes AM General LLC, American Rheinmetall Vehicles, BAE Systems plc, General Dynamics Corporation, GM Defense LLC, Mack Defense LLC and ND Defense LLC. Competition for sales of delivery vehicles includes Utilimaster, Morgan Olson and Rivian Automotive Inc. The Company believes its competitive strengths include powerful brands and product portfolios, innovative purpose-built solutions, strong market positions, focus on quality and lifecycle support, flexible technology enabled manufacturing, and a high-performing leadership team.

The Company generates revenue through the design, manufacture, and sale of purpose-built vehicles and equipment across three segments: Access, Vocational, and Transport. The Access segment designs and manufactures access and material handling equipment for use in a wide range of construction, industrial, agricultural, vegetation management and maintenance applications, with a customer base including equipment rental companies, construction contractors and home improvement centers. The Vocational segment includes businesses that design and manufacture commercial and custom fire apparatus, airport ground support equipment and gate equipment, aircraft rescue and firefighting vehicles, refuse and recycling collection vehicles, field service vehicles and truck-mounted cranes, front-discharge concrete mixer vehicles, and simulators and command vehicles, with sales made primarily to municipal and commercial customers in North America. The Transport segment designs, manufactures and sustains specialty vehicles and mobility systems for the U.S. Department of Defense and approved foreign customers, and also designs and manufactures the Next Generation Delivery Vehicle for the U.S. Postal Service under a contract that allows for the delivery of up to 165,000 vehicles over a 10-year period. The Company also arranges equipment financing and leasing solutions for its customers, primarily through third-party funding arrangements with independent financial companies, and occasionally provides credit support in connection with these financing and leasing arrangements.

The Access segment designs and manufactures access and material handling equipment under industry-leading brands JLG and SkyTrak, including aerial work platforms and telehandlers used in construction, industrial, agricultural, vegetation management and maintenance applications. The Access segment also includes Jerr-Dan towing and recovery vehicles such as wreckers, rotators and carriers. Access segment net sales were $4,494.4 million ¹ in 2025, compared to $5,164.7 million ² in 2024, a decrease of 13.0% ³. The Access segment reported operating income of $502.0 million ⁴ in 2025, compared to $805.4 million ⁵ in 2024, with an operating income margin of 11.2% ⁶ in 2025 versus 15.6% ⁷ in 2024. The decrease in net sales was primarily a result of lower organic sales volume ($659 million) ⁸ as a result of softer market conditions and the expiration in 2024 of an agreement to produce Caterpillar-branded telehandlers, as well as higher sales discounts ($118 million) ⁹, offset in part by incremental sales in 2025 related to the September 2024 acquisition of AUSA ($91 million) ¹⁰.

The Vocational segment includes the Pierce, Maxi-Metal, Oshkosh AeroTech, Oshkosh Airport Products, McNeilus, IMT, Oshkosh S-Series and Frontline Communications businesses. Pierce and Maxi-Metal design and manufacture commercial and custom fire apparatus. Oshkosh AeroTech designs and manufactures airport ground support equipment and gate equipment, and provides baggage, airport facility and operations, and equipment-monitoring technology services. Oshkosh Airport Products designs and manufactures aircraft rescue and firefighting vehicles. McNeilus designs and manufactures refuse and recycling collection vehicles and components. The segment also includes IMT-branded field service vehicles and truck-mounted cranes, Oshkosh S-Series front-discharge concrete mixer vehicles and Frontline Communications-branded simulators and command vehicles. Vocational segment net sales were $3,726.9 million ¹¹ in 2025, compared to $3,310.3 million ¹² in 2024, an increase of 12.6% ¹³. The Vocational segment reported operating income of $547.1 million ¹⁴ in 2025, compared to $397.1 million ¹⁵ in 2024, with an operating income margin of 14.7% ¹⁶ in 2025 versus 12.0% ¹⁷ in 2024. The increase in net sales was due to higher sales volume ($261 million) ¹⁸, largely as a result of increased production rates, and improved pricing ($157 million) ¹⁹.

In September 2024, the Company acquired AUSA, a privately held Spanish manufacturer of wheeled dumpers, rough terrain forklifts and telehandlers, for $114.5 million ²⁰. In August 2023, the Company acquired AeroTech from JBT Corporation for $804.6 million ²¹. In January 2023, the Company acquired Hinowa, an Italian manufacturer of compact crawler booms and tracked equipment, for $186.8 million ²². In July 2023, the Transport segment sold its snow removal apparatus business for $17.1 million ²³. In March 2023, the Vocational segment sold its rear-discharge concrete mixer business for $32.9 million ²⁴. In March 2025, the Company entered into an unsecured term loan with various lenders to borrow $500 million ²⁵. The Company repurchased 2,280,539 ²⁶ shares of its Common Stock at an aggregate cost of $278.0 million ²⁷ in 2025. The Company announced an increase in its quarterly dividend rate of 11.8% ²⁸, to $0.57 ²⁹ per share, beginning in the first quarter of 2026. The Company impaired the remaining Pratt Miller goodwill ($5.7 million) ³⁰ in 2025 as a reduction in royalties expected on defense contracts led to a further decline in the Company's expectations of future performance of the reporting unit.

Consolidated net sales were $10,422.3 million ³¹ in 2025, compared to $10,730.2 million ³² in 2024, a decrease of 2.9% ³³. Net income was $647.0 million ³⁴ in 2025, compared to $681.4 million ³⁵ in 2024. Diluted earnings per share were $10.02 ³⁶ in 2025, compared to $10.35 ³⁷ in 2024. Operating income was $939.5 million ³⁸ in 2025, compared to $1,010.7 million ³⁹ in 2024, with operating income margin of 9.0% ⁴⁰ in 2025 versus 9.4% ⁴¹ in 2024. Cash flows from operations in 2025 were $783.4 million ⁴², an increase of $233 million ⁴³ from 2024. The decrease in consolidated net sales was primarily due to lower organic sales volume in the Access ($659 million) ⁴⁴ and Transport ($107 million) ⁴⁵ segments, offset in part by higher sales volume in the Vocational segment ($261 million) ⁴⁶, incremental sales related to the September 2024 acquisition of AUSA ($91 million) ⁴⁷ and improved pricing ($69 million) ⁴⁸.

The Company estimates consolidated sales will be approximately $11.0 billion ⁴⁹ in 2026, compared to $10.4 billion ⁵⁰ in 2025. The Company expects consolidated operating income in 2026 will be approximately $1.06 billion ⁵¹, resulting in diluted earnings per share of approximately $10.90 ⁵². Included in the Company's expectations is amortization of intangible assets of approximately $55 million ⁵³, or $0.60 ⁵⁴ per share. Excluding amortization of intangible assets, the Company expects adjusted diluted earnings per share in 2026 to be approximately $11.50 ⁵⁵. The Company estimates tariffs will total approximately $200 million ⁵⁶ in 2026, which is an increase of approximately $165 million ⁵⁷ from 2025. The Company expects Access segment sales will be approximately $4.2 billion ⁵⁸ in 2026, a decrease of approximately 7.0% ⁵⁹ compared to 2025 sales. The Company expects operating income margin in the Access segment in 2026 will be approximately 9.7% ⁶⁰, down from 11.2% ⁶¹ in 2025. The Company expects Vocational segment sales of approximately $4.2 billion ⁶² in 2026, an increase of approximately 13.0% ⁶³ compared to 2025 sales. The Company expects Vocational segment operating income margin in 2026 will be approximately 16.1% ⁶⁴, compared to 14.7% ⁶⁵ in 2025. The Company expects Transport segment sales will be approximately $2.5 billion ⁶⁶ in 2026, an increase of approximately 19% ⁶⁷ compared to 2025 sales. The Company expects Transport segment operating margin will be approximately 4.0% ⁶⁸ in 2026, compared to 3.7% ⁶⁹ in 2025. The Company estimates corporate and other costs in 2026 will be approximately $185 million ⁷⁰. The Company estimates net interest expense will be approximately $105 million ⁷¹ in 2026, compared to $109 million ⁷² in 2025. The Company estimates the tax rate for 2026 will be approximately 24.5% ⁷³ and average share count will be approximately 63 million ⁷⁴ shares. The Company expects earnings per share in the first quarter of 2026 will be approximately $0.85 ⁷⁵.

The Company expects Access segment sales will be approximately $4.2 billion ⁷⁶ in 2026, a decrease of approximately 7.0% ⁷⁷ compared to 2025 sales as non-residential construction activity is expected to be relatively consistent with 2025. The Company expects that Access segment sales in the first quarter of 2026 will be lower than the first quarter of 2025 due to its strong sales in the fourth quarter of 2025, which the Company believes were a result of strong customer purchases in advance of announced 2026 pricing actions. The Company expects Vocational segment sales of approximately $4.2 billion ⁷⁸ in 2026, an increase of approximately 13.0% ⁷⁹ compared to 2025 sales reflecting expected increases in production volume from improved throughput and improvements in pricing in municipal fire apparatus as the Vocational segment delivers its backlog. The Company expects Transport segment sales will be approximately $2.5 billion ⁸⁰ in 2026, an increase of approximately 19% ⁸¹ compared to 2025 sales, reflecting improved pricing under recent contracts and a progressive increase in production under the Company's Next Generation Delivery Vehicle (NGDV) contract. The Company's expectations contemplate a receipt of a follow-on NGDV delivery order from the USPS, which the Company expects would result in a favorable cumulative catch-up adjustment at the time the order is received.

The Company expects operating income margin in the Access segment in 2026 will be approximately 9.7% ⁸², down from 11.2% ⁸³ in 2025 due to the impact of fixed costs relative to lower expected sales levels. The Company expects Vocational segment operating income margin in 2026 will be approximately 16.1% ⁸⁴, compared to 14.7% ⁸⁵ in 2025, as a result of expected continued favorable price/cost dynamics and improved production throughput. The Company expects Transport segment operating margin will be approximately 4.0% ⁸⁶ in 2026, compared to 3.7% ⁸⁷ in 2025, reflecting the elimination of adverse cumulative catch-up adjustments experienced in 2025 and the expected receipt of a follow-on delivery order from the USPS are expected to be offset in part by higher engineering spending and the non-recurrence in 2026 of the impact of a sale of a license of Joint Light Tactical Vehicles (JLTV)-related intellectual property to the U.S. government for $25 million ⁸⁸.

The Company expects cash flow from operations to be between $750 million ⁸⁹ and $850 million ⁹⁰ in 2026. The Company anticipates that it will spend $200 million ⁹¹ on capital expenditures in 2026. The Company's estimates assume that present levels of tariff rates continue. The Company estimates tariffs will total approximately $200 million ⁹² in 2026, which is an increase of approximately $165 million ⁹³ from 2025.

The Company anticipates that it will spend $200 million ⁹⁴ on capital expenditures in 2026. The Company repurchased 2,280,539 ⁹⁵ shares of its Common Stock at an aggregate cost of $278.0 million ⁹⁶ in 2025. The Company's Board of Directors authorized the repurchase of 12,000,000 ⁹⁷ shares in May 2022, of which 7,945,869 ⁹⁸ shares remained as of December 31, 2025. The Company announced an increase in its quarterly dividend rate of 11.8% ⁹⁹, to $0.57 ¹⁰⁰ per share, beginning in the first quarter of 2026.

Tariffs enacted in the U.S. during the year cost the Company $35 million ¹⁰¹, or $0.42 ¹⁰² per share. The Company estimates tariffs will total approximately $200 million ¹⁰³ in 2026, which is an increase of approximately $165 million ¹⁰⁴ from 2025. The Company's estimates assume that present levels of tariff rates continue. The Company experienced a dynamic and unpredictable international trade environment throughout 2025, which contributed to economic uncertainty and the Company saw some customers being judicious with spending on new equipment.

Management's message emphasizes that despite a dynamic and unpredictable international trade environment throughout 2025, the Company reported solid 2025 earnings per share of $10.02 ¹¹¹. Driven by the dedication and hard work of its more than 18,000 team members, the Company made tremendous progress on its initiatives during the year. As a result of increased production rates, sales of delivery vehicles were up $365 million ¹¹², or 352% ¹¹³, in 2025 compared to 2024. The Access segment reported an operating income margin of 11.2% ¹¹⁴ in an environment where sales were down 13.0% ¹¹⁵. Continued production throughput in the Vocational segment contributed to the 12.6% ¹¹⁶ increase in Vocational segment sales over the prior year, while increasing margins to 14.7% ¹¹⁷, an increase of 270 basis points ¹¹⁸ over 2024. Higher Vocational segment sales and higher sales in the delivery vehicle business as well as improved pricing nearly offset the decline in revenue in the access equipment and defense businesses. Improved communications with customers led to strong customer advances, resulting in cash flows from operations in 2025 of $783 million ¹¹⁹, an increase of $233 million ¹²⁰ from 2024. The One Big Beautiful Bill Act (OBBBA), enacted in the U.S. in July 2025, lowered tax payments in 2025 by approximately $90 million ¹²¹ as a result of the acceleration of deductions. The Company announced an increase in its quarterly dividend rate of 11.8% ¹²², to $0.57 ¹²³ per share, beginning in the first quarter of 2026, marking the Company's twelfth straight year of a double-digit percentage increase in its dividend rate. For 2026, the Company estimates consolidated sales will be approximately $11.0 billion ¹²⁴ and expects consolidated operating income of approximately $1.06 billion ¹²⁵, resulting in diluted earnings per share of approximately $10.90 ¹²⁶.

Consolidated net sales were $10,422.3 million ¹²⁷ in 2025, compared to $10,730.2 million ¹²⁸ in 2024. Net income was $647.0 million ¹²⁹ in 2025, compared to $681.4 million ¹³⁰ in 2024. Diluted earnings per share were $10.02 ¹³¹ in 2025, compared to $10.35 ¹³² in 2024. Operating income was $939.5 million ¹³³ in 2025, compared to $1,010.7 million ¹³⁴ in 2024. Gross margin was 17.5% ¹³⁵ in 2025, compared to 18.4% ¹³⁶ in 2024. Operating income margin was 9.0% ¹³⁷ in 2025, compared to 9.4% ¹³⁸ in 2024. Cash flows from operations were $783.4 million ¹³⁹ in 2025, compared to $550.1 million ¹⁴⁰ in 2024. Total debt was $1,100.9 million ¹⁴¹ at December 31, 2025, compared to $961.8 million ¹⁴² at December 31, 2024. Cash and cash equivalents were $479.8 million ¹⁴³ at December 31, 2025, compared to $204.9 million ¹⁴⁴ at December 31, 2024. Total shareholders' equity was $4,530.5 million ¹⁴⁵ at December 31, 2025, compared to $4,152.1 million ¹⁴⁶ at December 31, 2024. The effective tax rate was 22.7% ¹⁴⁷ in 2025, compared to 23.3% ¹⁴⁸ in 2024. The effective tax rate in 2025 included net discrete tax benefits of $17 million ¹⁴⁹ primarily related to the release of uncertain tax positions on the resolution of a multi-year federal income tax audit. During 2025, the Company recorded intangible asset impairments of $5.7 million ¹⁵⁰ related to the remaining Pratt Miller goodwill. During 2024, the Company recorded impairment charges related to Pratt Miller goodwill and intangibles of $52 million ¹⁵¹. Cumulative catch-up adjustments on contracts in the Transport segment negatively impacted operating income by approximately $35 million ¹⁵² in 2025. The Access segment reported operating income of $502.0 million ¹⁵³ in 2025, compared to $805.4 million ¹⁵⁴ in 2024. The Vocational segment reported operating income of $547.1 million ¹⁵⁵ in 2025, compared to $397.1 million ¹⁵⁶ in 2024. The Transport segment reported operating income of $77.8 million ¹⁵⁷ in 2025, compared to $51.4 million ¹⁵⁸ in 2024.

The access equipment market is highly cyclical and impacted by the strength of economies, residential and non-residential construction spending, and the ability of rental companies to obtain third-party financing. The Company's performance under its USPS contract is subject to risks including the USPS ordering fewer units than expected, which could result in an impairment of deferred contract costs that exceed future profits on existing orders by approximately $135 million ¹⁰⁵ at December 31, 2025. Tariffs implemented by the U.S. during 2025 cost the Company approximately $35 million ¹⁰⁶ in 2025, and the Company estimates that will increase to approximately $200 million ¹⁰⁷ in 2026. The Company is dependent on U.S. government contracts for a significant portion of its business, with approximately 20% ¹⁰⁸ of net sales in 2025 made to the U.S. government, and these contracts are subject to risks including competition, termination, and funding uncertainty. The Company has a substantial amount of goodwill and other indefinite-lived intangible assets, with approximately 78% ¹⁰⁹ of these intangibles concentrated within JLG at December 31, 2025, and an impairment in carrying value could negatively affect operating results. The Company's Access segment's ten largest debtors at December 31, 2025 represented approximately 27% ¹¹⁰ of consolidated gross receivables, creating a concentration of credit risk.