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01/09 23:51
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call shows mixed signals: strong free cash flow and improved margins in the transport segment are positive, but declining sales in the Access segment and weak guidance affect sentiment. Q&A highlights challenges with tariffs and production delays, while management's lack of clarity on future guidance raises concerns. Given these mixed factors, the stock is likely to see a neutral movement in the short term.
Revenue $2.7 billion in Q3 2025, a decrease of $53 million or 2% from the same quarter last year, primarily due to lower sales volume in the Access segment partially offset by higher Vocational and Transport sales volume and improved pricing.
Adjusted Operating Margin 10.2% in Q3 2025, roughly in line with last year on slightly lower sales, reflecting solid performance across segments.
Adjusted Earnings Per Share (EPS) $3.20 in Q3 2025, an increase of $0.27 or 9.2% over the prior year, driven by operating performance and lower tax expense due to the resolution of a multiyear U.S. federal income tax audit.
Free Cash Flow $464 million in Q3 2025, compared to $272 million in Q3 2024, primarily reflecting working capital changes, including customer advances and inventory.
Access Segment Sales $1.1 billion in Q3 2025, a decrease of $254 million or nearly 19% from last year, due to weaker market conditions in North America and higher discounts.
Vocational Segment Sales $968 million in Q3 2025, an increase of $154 million or nearly 19% from last year, led by improved throughput from municipal fire apparatus and robust growth in airport products.
Transport Segment Sales $588 million in Q3 2025, an increase of $48 million from last year, driven by delivery vehicle revenue growth of $114 million to $146 million, partially offset by lower defense vehicle revenue.
Transport Segment Operating Income Margin 6.2% in Q3 2025, compared to 2.1% last year, reflecting improved pricing on new contracts, favorable mix, and a one-time licensing agreement for JLTV-related intellectual property, offset by higher warranty costs.
Family of Multi-mission Autonomous Vehicles (FMAV): Introduced at the AUSA Defense Conference, featuring three production-ready variants from the autonomous vehicle portfolio.
Tempest-si Deicer: Launched to improve visibility and controls for operators in congested airport ramps.
AG619 mid-sized ag telehandler: Revealed at the World Dairy Expo, targeting the mid-sized agricultural market.
LiftPod: Launched in Europe, providing a portable and stowable low-level access solution for commercial customers.
McNeilus Volterra ZSL refuse collection vehicle: Recognized as the first fully integrated electric refuse collection vehicle, offering zero emissions and ergonomic design.
Airport Products: Revenue increased by 17% year-over-year, driven by strong Jet Bridge and RF businesses.
Vocational segment: Recorded $1.1 billion in orders, led by Pierce fire trucks and AeroTech products.
Transport segment: Delivery vehicle revenue grew by 37% sequentially, now representing 25% of the segment's revenue.
Adjusted operating margin: Achieved 10.2% on $2.7 billion revenue in Q3, reflecting strong performance across segments.
Cost management: Aggressively pursuing cost levers to offset tariff impacts and planning price increases in 2026.
Production efficiency: Advancing initiatives to streamline fire truck production and reduce lead times.
Tariff mitigation: Engaging with customers to address tariff impacts and planning price adjustments in 2026.
Long-term growth: Targeting to double adjusted EPS to $18-$22 by 2028, supported by strategic initiatives and operational focus.
Tariffs and Economic Environment: Customers are cautious with capital expenditure spending due to tariffs and the current economic environment, impacting demand in the Access segment.
Lower Revenue Expectations: Revised 2025 adjusted EPS guidance reflects slightly lower revenue expectations for both Access and Transport segments.
Production Challenges: Challenges in ramping production of the NGDV (Next Generation Delivery Vehicle) while maintaining quality, which could impact production goals.
Access Segment Demand: Weaker market conditions in North America and higher discounts have led to a 19% decrease in sales for the Access segment.
Defense Vehicle Revenue Decline: Lower defense vehicle revenue due to the wind-down of the domestic JLTV program, partially offset by international sales.
Tariff Impact on Pricing: Initial discussions with customers regarding the impact of tariffs on pricing, with expectations to raise prices in 2026 to offset input costs.
Interest Rates and Customer Spending: Sustained higher interest rates are affecting customer spending and demand for products, particularly in the Access segment.
Production Bottlenecks: Bottlenecks in the production of highly customized fire trucks, impacting efficiency and throughput.
2025 Adjusted EPS Guidance: Revised to a range of $10.50 to $11, reflecting slightly lower revenue expectations for both Access and Transport segments.
Access Segment Market Activity: End market activity remains healthy, but customers are cautious with capital expenditures due to tariffs and the current economic environment. Long-term tailwinds include lower interest rates, project deferrals, aged equipment, and manufacturing reshoring.
Pricing Adjustments: Initial discussions with customers regarding the impact of tariffs on pricing, with expectations to raise prices in 2026 to offset input costs.
Vocational Segment Backlog: Strong orders recorded, with plans to reduce backlog over the next few years by improving production efficiency and addressing bottlenecks.
NGDV Production: Production ramping up with targeted line rates to meet annual production goals, despite challenges typical of new product launches.
2025 Revenue Outlook: Expected to be approximately $10.3 billion to $10.4 billion.
2025 Cash Flow Outlook: Updated to $450 million to $550 million, reflecting lower capital expenditures and rigorous spending controls.
Share Repurchases: Plan to continue share repurchases through the balance of the year at a modestly higher pace than in the third quarter.
Long-term EPS Growth: Vision to roughly double adjusted EPS to a range of $18 to $22 per share by 2028, with each quarter contributing toward this goal.
Share Repurchase: During the quarter, Oshkosh Corporation repurchased approximately 666,000 shares of its stock for $91 million, bringing year-to-date share repurchases to $159 million. Share repurchases during the previous 12 months benefited adjusted EPS by $0.05 compared to the third quarter of 2024. The company plans to continue with share repurchases through the balance of the year at a modestly higher pace than in the third quarter.
The earnings call shows mixed signals: strong free cash flow and improved margins in the transport segment are positive, but declining sales in the Access segment and weak guidance affect sentiment. Q&A highlights challenges with tariffs and production delays, while management's lack of clarity on future guidance raises concerns. Given these mixed factors, the stock is likely to see a neutral movement in the short term.
The earnings call summary and Q&A session indicate strong financial performance, robust backlog, and positive guidance across various segments. Management's strategies to offset tariff impacts and plans for increased share buybacks further bolster sentiment. While there are some uncertainties, such as tariff impacts and backlog mix, the overall outlook remains optimistic, driven by technological advancements and market demand. This suggests a positive stock price movement in the short term.
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