Oshkosh beats the Street, again
The truck maker has delivered 13 straight positive earnings surprises.
By Zacks Equity Research
Oshkosh Corporation (OSK) stands to benefit from strong overseas demand for emergency equipment and a recovery in the U.S. housing sector.
The specialty truck maker, based in Wisconsin, has delivered 13 straight positive earnings surprises, including a roughly 44% surprise in the most recent quarter.
With low valuation metrics, including a price-to-sales (P/S) ratio at just 0.3, this Zacks No. 1 Rank ("strong buy") is a value play.
On Oct. 26, Oshkosh posted fiscal fourth-quarter adjusted earnings of 65 cents per share, which surpassed the Zacks Consensus Estimate of 45 cents. This company has now topped the Zacks Consensus Estimate for a very impressive 13 consecutive quarters.
Revenues, however, edged lower by 2.3% year over year to $2.06 billion. Healthy growth across all non-defense segments was offset by a decline in the core defense business.
Revenues from the Access Equipment segment jumped 15.6% to $716 million, benefiting from higher volume in North America and price increases. Fire and Emergency segment sales climbed 14.3% to $228.9 million, while revenues from the Commercial unit soared 34.2% to $181.5 million. However, the company's Defense division was the weak spot in the quarter with sales slipping 18.6% to $953.7 million.
Oshkosh reaffirmed its earnings from continuing operations target for fiscal 2013 of between $2.35 and $2.60 per share. Over the next three years, it aims to double its adjusted earnings from that of fiscal 2012. Oshkosh expects a recovery in housing to benefit its access equipment business, which includes telehandlers used in housing construction.
Separately, the company snubbed a roughly $3 billion takeover offer from Carl Icahn, its largest stakeholder, calling the bid of $32.50 per share inadequate and not in the best interest of its shareholders.
Earnings momentum rising for fiscal 2013
The Zacks Consensus Estimate for fiscal 2013 is up 3.2% in the last 30 days to $2.61 per share, reflecting a projected annualized growth of nearly 15%. There have been 7 upward revisions out of 12 total estimates in the past month, and also 2 upward revisions in the past 7 days.
A value stock
Oshkosh has a lot to attract investors seeking value. In addition to a low P/S, the stock has an attractive forward price-to-earnings (P/E) ratio of 10.97. It also sports a low price-to-book (P/B) ratio of 1.5. (A P/S ratio lower than 1.0, a P/E below 15.0 and a P/B ratio under 3.0 generally indicate value.)
Oshkosh's shares have performed reasonably well so far this year, generating a year-to-date return of roughly 27%. The stock has outperformed the S&P 500 over the past year, delivering a return of roughly 37%, versus 14% for the benchmark.
Founded in 1917, Oshkosh Corporation makes an array of specialty vehicles and vehicle bodies globally. Its offerings include tactical trucks (including hauling tanks and missile systems) for the Department of Defense; aerial work platforms and telehandlers for a range of applications including construction; fire apparatus, emergency vehicles and refuse collection vehicles. Oshkosh, which has a market cap of roughly $2.6 billion, is among the leading defense vehicle manufacturers in the world. The U.S. government represented around 45% of its sales in fiscal 2012.
More from Zacks.com
Copyright © 2014 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
The solid report comes a month after the retailer closed all of its Canadian operations.
VIDEO ON MSN MONEY
Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.
Contributors include professional investors and journalists affiliated with MSN Money.
Follow us on Twitter @topstocksmsn.