By Calvin Biesecker
Sales of heavy tactical vehicles, a new variant of mine resistant vehicles, and more parts and services combined with increase manufacturing efficiencies led to strong fourth quarter financial results in Oshkosh Truck Corp.‘s [OSK] defense business, although these results were more than offset by weak sales and income in the company’s other businesses.
Operating income at the Defense segment more than doubled to $161.7 million from $75.1 million due to a 55 percent jump in sales to $855.4 million. Margins increased a whopping 5.3 percent to 18.9 percent.
The defense sales increase was driven by new and remanufactured Family of Heavy Tactical Vehicles, Mine Resistant Ambush Protected-All Terrain Vehicle production, and higher parts and service sales. Operating income was helped by an inventory adjustment and lower material costs.
Sales and operating income in the Access Equipment, Fire and Emergency, and Commercial vehicle and product lines were all down due to weakness in the domestic and global economies.
Thanks to a hefty tax benefit and the sale of a commercial business, Oshkosh’s net income was up 160 percent to $140.3 million, $1.68 earnings per share (EPS), from $53.7 million (72 cents EPS). The tax and business sale gains added $87.9 million ($1.05 EPS) to net income.
Sales in the quarter fell 20 percent to $1.5 billion from $1.9 billion a year ago due to the declines in the commercial segments.
For the fiscal year, Oshkosh lost $1.1 billion ($14.37 EPS) versus net income of $79.3 ($1.06 EPS) a year ago. While operating income was up in the Defense segment, the company’s other businesses all swung to a loss. Sales for the year declined 23 percent to $5.3 billion from $6.9 billion, with defense sales up and all the other segments down.
Oshkosh’s backlog at the end of September stood at $5.6 billion, up more than 100 percent from $2.4 billion a year ago, boosted entirely by the defense business.