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How Did Oshkosh Perform in 3Q16?

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Price movement

Oshkosh (OSK) has a market cap of $3.0 billion. It rose by 9.9% to close at $53.65 per share on July 28, 2016. The stock’s weekly, monthly, and year-to-date (or YTD) price movements were 9.8%, 16.8%, and 38.8%, respectively, on the same day.

OSK is trading 11.8% above its 20-day moving average, 14.4% above its 50-day moving average, and 31.7% above its 200-day moving average.

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Related ETFs and peers

The PowerShares Aerospace & Defense ETF (PPA) invests 1.3% of its holdings in Oshkosh. The ETF tracks a market-cap-weighted index of US-listed stocks involved in the defense, military, homeland security, and space industries. The YTD price movement of PPA was 9.0% on July 28, 2016.

The iShares Morningstar Small Value (JKL) invests 0.71% of its holdings in Oshkosh. The ETF tracks a market-cap-weighted index of US small cap value stocks. The index stocks from the 90th to the 97th percentile of the market-cap spectrum, using fundamental factors.

The market caps of Oshkosh’s competitors are as follows:

  • Terex (TEX): $2.5 billion
  • Caterpillar (CAT): $48.8 billion

Performance of Oshkosh in fiscal 3Q16

Oshkosh reported fiscal 3Q16 net sales of $1.7 billion, a rise of 6.2% compared to net sales of $1.6 billion in fiscal 3Q15. Sales for its access equipment, defense, and fire & emergency segments rose by 2.1%, 36.1%, and 24.4%, respectively. Sales for its commercial segment fell by 2.1% in fiscal 3Q16 compared to fiscal 3Q15.

The company’s gross profit margin and operating income rose by 2.2% and 7.5%, respectively, in fiscal 3Q16 compared to the prior year period.

Its net income fell to $84.2 million in fiscal 3Q16 compared to $89.7 million in fiscal 3Q15. It reported EPS (earnings per share) of $1.13 in fiscal 3Q16 and 3Q15.

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Oshkosh’s cash and cash equivalents rose by 6.1%, and its inventories fell by 3.6% in fiscal 3Q16 compared to fiscal 4Q15. Its current ratio fell to 1.6x, and its debt-to-equity ratio rose to 1.5x in fiscal 3Q16 compared to a current ratio and debt-to-equity ratio of 1.7x and 1.4x, respectively, in fiscal 4Q15.

Quarterly dividend

Oshkosh has declared a quarterly cash dividend of $0.19 per share on its common stock. The dividend will be paid on August 29, 2016, to shareholders of record as of August 15, 2016.

Projections

The company has made the following projections for fiscal 2016:

  • net sales in the range of $6.0 billion to $6.1 billion
  • EPS in the range of $2.60 to $2.80
  • operating income in the range of $340 million to $360 million
  • free cash flow of ~$400 million

These projections reflect higher defense and fire & emergency segment sales and operating income. They’ll be partially offset by higher corporate costs, a higher effective income tax rate, and lower access equipment segment operating income.

Next we’ll take a look at Bunge Limited (BG).

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