Q3 2024 Oshkosh Corp Earnings Call
Good morning and thank you for joining us. Earlier today, we published our third quarter 2024 results. Detailed insights and a copy of the release can be found on our company website. The earnings call is complemented by a slide presentation which offers a reconciliation from GAAP to non-GAAP financial measures that will be used during this call. Both audio replay and the slide presentation will remain available for approximately 12 months.
Forward-Looking Statements
Our following remarks and responses to questions may contain forward-looking statements subject to risks that might cause actual outcomes to differ significantly. These risks are specified in our SEC filings, and we do not commit to updating these until the next quarterly earnings call.
Performance Overview
John Pfeifer, President and Chief Executive Officer, outlined the positive growth trajectory for this quarter, highlighting a revenue increase of 9% and an adjusted operating margin of 10.3%. Adjusted EPS was $2.93, in line with expectations set previously. Promising progress and growth were noted across the vocational business portfolio, along with an optimistic defense segment outlook due to new contract award pricing.
Key Business Developments
Significant advancements include the United States Postal Service integrating our next-generation delivery vehicles (NGDV) for last-mile solutions, reflecting our market-leading innovative prowess. Additionally, the Science Based Targets initiative has validated our greenhouse gas emission reduction targets, underscoring our dedication to sustainability.
Segment Updates
The Access segment witnessed year-over-year sales growth. Despite softer market conditions in North America, healthy long-term margins are anticipated. The segment sees opportunities with mega projects and has begun adopting new technologies, such as the ClearSky™ Smart Fleet connected solutions platform.
We also finalized the acquisition of a leading European specialty equipment manufacturer, which will extend our agricultural reach and support growth via our North American sales channel.
In the Vocational segment, revenue grew by 17.6%, boasting an adjusted operating margin of 13.7%. Strong demand in vocational products is evident, bolstered by a growing backlog. The segment is keen on technological advancements, emphasizing electric and autonomous product features.
The defense segment experienced a 14% sales boost, driven by NGDV production and increased tactical vehicle deliveries. Expecting to reach full production by 2025, the segment is set to enjoy robust revenue expectations by 2026. Several contract extensions have been secured, promising visibility into steady customer demand and resilient margins.
Financial Highlights
Michael Pack, Executive Vice President and Chief Financial Officer, elaborated on the financial results with consolidated sales for the third quarter marked at $2.74 billion—a 9% increase over the previous year. Adjusted operating income increased to $283 million, driven by higher sales volumes and improved price-cost dynamics.
Looking ahead to the full-year 2024 estimates, a reduction in revenue expectation to approximately $10.6 billion was noted, with adjustments reflecting softer market conditions in North America.
Conclusion and Future Outlook
Despite the revised expectations for 2024, meaningful growth in revenue and adjusted operating income is anticipated compared to 2023. Oshkosh Corp continues harnessing its workforce’s strength, innovative products, and core businesses to foster long-term shareholder value.
We appreciate your participation in this earnings discussion. For further queries, please follow standard procedure to enter the Q&A queue. Thank you for your attention and engagement in Oshkosh Corp’s future progress.
