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Oshkosh Improves Outlook Based on Strong Demand for Access Equipment
Oshkosh Corporation recently reported fiscal 2012 second quarter net income attributable to Oshkosh Corporation of $37.3 million, or $0.41 per diluted share, compared to $67.9 million, or $0.74 per diluted share, in the second quarter of fiscal 2011. Results for the second quarter of fiscal 2012 included after-tax charges of $0.02 per diluted share related to the proxy contest in connection with the company's 2012 annual shareholders' meeting and $0.02 per diluted share related to the company's exit from its U.S. mobile medical trailer product line and workforce reductions at Pierce. Consolidated net sales in the second quarter of fiscal 2012 were $2.08 billion, an increase of 18.9 percent compared to the prior year second quarter. Increased replacement driven demand for aerial work platforms and telehandlers in the access equipment segment and higher defense segment Family of Medium Tactical Vehicles (FMTV) sales were offset in part by the expected decline in sales of Family of Heavy Tactical Vehicles (FHTV) and aftermarket parts, also in the defense segment.
Consolidated operating income in the second quarter of fiscal 2012 was $75.9 million, or 3.7 percent of sales, compared to $132.4 million, or 7.6 percent of sales, in the prior year second quarter. Increased earnings on higher access equipment segment sales were more than offset by lower defense segment earnings that resulted from an adverse product mix.
"Strong performance by our access equipment segment drove quarterly results above our expectations," said Charles L. Szews, Oshkosh Corporation president and chief executive officer. "We believe customer actions and industry metrics point to a sustained recovery in global access equipment markets. Our success in responding to this recovery enables us to raise our performance outlook for the full fiscal year 2012."
"We expect the execution of our MOVE strategy in fiscal 2012 will lead to a strong improvement in our company's earnings in fiscal 2013. During the second quarter, we continued to take steps toward optimizing the cost structures of our businesses. In our fire & emergency segment, we exited the U.S. mobile medical trailer product line, restructured our workforce at Pierce and made solid progress integrating multiple product lines in our Florida operations. In our commercial segment, we reconfigured our refuse collection vehicle production lines to improve production efficiencies and closed a fabrication facility. In the defense segment, we continued to reduce our costs on the FMTV contract. And, we launched innovative new products like our Rental Access equipment segment sales increased 61.4 percent to $760.4 million for the second quarter of fiscal 2012 compared to the prior year second quarter principally as a result of higher unit volumes and the realization of previously announced price increases. Sales grew by double-digit percentages compared to the prior year quarter in all major regions of the globe, with the largest increase in North America driven largely by replacement of aged equipment.
In the second quarter of fiscal 2012, access equipment segment operating income increased 285.3 percent to $68.4 million, or 9.0 percent of sales, compared to prior year second quarter operating income of $17.7 million, or 3.8 percent of sales. The increase in operating results reflected higher volume, the realization of previously announced price increases, improved product mix and improved absorption related to higher sales volume, offset in part by higher raw material costs and higher new product development spending.
Updated Fiscal 2012 Expectations
The company is increasing its outlook for fiscal 2012 primarily due to stronger than expected orders and sales in the access equipment segment in the second quarter of fiscal 2012. The company now expects sales in the access equipment segment will be 35 percent to 40 percent higher in fiscal 2012 compared to fiscal 2011 with operating income margins of 7.5 percent to 8.0 percent in the segment. In addition, the company has reduced expectations for the fire & emergency segment's operating income to approximately breakeven as a result of second quarter results in this segment. The company will discuss these changes and other changes to the company's fiscal 2012 outlook during a conference call later today.
About Oshkosh Corporation
Oshkosh Corporation is a leading designer, manufacturer and marketer of a broad range of specialty access equipment, commercial, fire & emergency and military vehicles and vehicle bodies. Oshkosh Corporation manufactures, distributes and services products under the brands of Oshkosh, JLG, Pierce, McNeilus, Medtec, Jerr-Dan, Oshkosh Specialty Vehicles, Frontline, SMIT, CON-E-CO, London and IMT. Oshkosh products are valued worldwide in businesses where high quality, superior performance, rugged reliability and long-term value are paramount. For more information, log on to www.oshkoshcorporation.com.
Article Date: 2012-04-30
Source: Associated Equipment Distributors
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