Oshkosh (OSK) Q2 2024 earnings summary

Executive summary

• Q2 2024 sales rose 18% year-over-year to $2.85 billion, driven by organic growth, AeroTech acquisition, and improved pricing.

• Adjusted operating income increased 36% to $328.2 million, with adjusted operating margin at 11.5% and adjusted EPS at $3.34.

• Initial shipments and ramp-up of Next Generation Delivery Vehicle (NGDV) for USPS began, expected to offset JLTV decline in Defense segment in 2025.

• 2024 adjusted EPS guidance raised to $11.75, reflecting strong segment performance and robust demand.

• Announced acquisition of AUSA, a European specialty equipment manufacturer, expected to close in H2 2024.

Financial highlights

• Q2 consolidated sales were $2.85 billion, up $433.8 million (18%) from the prior year, with $192 million from AeroTech and improved pricing.

• Adjusted operating income rose to $328.2 million (11.5% of sales), up 36.1% year-over-year.

• Adjusted EPS was $3.34, up from $2.74 in the prior year; GAAP EPS was $2.56, impacted by $51.6 million in Defense segment impairments.

• Repurchased 335,000 shares for $39 million in Q2; paid $60.2 million in dividends in H1 2024.

• Debt to total capitalization increased to 29.4% from 17.3% at year-end 2023.

Outlook and guidance

• 2024 adjusted EPS guidance raised to $11.75; GAAP EPS expected at $10.45 due to impairment charges.

• 2024 sales forecast at $10.7 billion; adjusted operating income at $1.14 billion.

• Q3 2024 adjusted EPS expected at $3.00, with sales up 10% year-over-year.

• Free cash flow guidance reduced to $375 million due to higher working capital; capex target at $300 million.

• 2025 outlook: Access sales expected flat with 2024, Defense NGDV revenue to offset JLTV decline, Vocational segment supported by strong backlog and pricing.