Oshkosh Corporation Q2 FY2025 earnings call

• Positive response to June 5 Investor Day, highlighting Oshkosh's attractive investment aspects with a focus on autonomy, electrification, etc., and 2028 targets for revenue growth and margin transformation.
• Contract wins: Signed 3-year sole-source FMTV contract with DoD, including LVAD launch; FHTV contract from last year; progress on USPS NGDV program with over 1.5 million cumulative miles.
• New product launch: Micro-sized scissor lift for data centers launched in May, with plans to expand capacity.
• Leadership change: Steve Nordlund joined to lead Transport segment, bringing defense contract experience.

The Access segment had sales of $1.26 billion with an adjusted operating income margin of 14.8%. Factors included the expiration of the Cat-branded telehandler agreement and lower sales volume in Europe, offset by AUSA sales. The Vocational segment had sales of $970 million, achieving an adjusted operating income margin of 16.3%, a 220 basis point increase year-over-year due to higher sales volume and improved pricing. The Transport segment had sales of $479 million, with an improved operating income margin to 3.7% from 2.1% last year, driven by the FHTV contract and progress on the USPS NGDV program.

• Revenue and EPS: Projected adjusted EPS for the year in the range of $11 per share on revenues of approximately $10.6 billion, equal to pre-tariff guidance.
• Free cash flow: Increased outlook from $300-400 million to $400-500 million, driven by tax bill and operating performance.
• Share repurchases: Expect to materially increase share buyback pace, with year-to-date repurchases at $70 million and aiming to double from last year's $120 million.

• Dynamic tariff environment, which could impact segments differently, but mitigation strategies in place to offset tariff headwinds.

Q: On Access segment margins and tariffs A: Second half margins affected by tariffs, with mitigation actions and expected offset Q: Tariff commentary and Transport segment outlook A: Tariffs are dynamic, Transport expected to improve with new contracts Q: Access equipment sales discounts and demand A: Sales discounts due to competitive environment, but demand from big projects remains strong Q: Vocational margin guidance and backlog A: Vocational margins expected to continue improving with backlog pricing and capacity ramp Q: Capital allocation and share buybacks A: Priorities are balance sheet, organic growth, share repurchases, then M&A