Equipment Type

Oshkosh Reports 4Q Sales Decrease

Oshkosh Corp. reported fiscal 2014 fourth quarter net sales from continuing operations of $1.67 billion, down 3.4 percent from 2013.

October 31, 2014

Oshkosh Corp. reported fiscal 2014 fourth quarter net sales from continuing operations of $1.67 billion, down 3.4 percent from 2013. Net income for continuing operations was $77.8 million, more than double that of 2013 results of $35.7 million, or $0.40 per diluted share, in the fourth quarter of fiscal 2013.

Full-year results include net sales of $6.8 billion, up from $7.7 in 2013, and net income of $309.3 million, down from $316.3 million.

Results for the fourth quarter of fiscal 2014 were adversely impacted by a combined $2.4 million after-tax pension curtailment and pension settlement charge in the defense segment, the company reported. Results for the fourth quarter of fiscal 2013 were adversely impacted by a$5.5 million after-tax, non-cash impairment charge related to an intangible asset in the access equipment segment and after-tax costs of $2.4 million related to the extension of a union contract with defense segment production employees. Excluding these items, fiscal 2014 fourth quarter adjusted net income was $80.2 million, or $0.96 per diluted share, compared to $43.6 million, or $0.49 per diluted share, in the fourth quarter of fiscal 2013.

Consolidated net sales in the fourth quarter of fiscal 2014 were $1.67 billion, a decrease of 3.4 percent. Expected lower defense segment sales were offset in part by improved demand in the Company’s access equipment and commercial segments.

For financials and further explanation, see the company’s website.

Factors affecting fourth quarter results for the Company’s business segments included:

Commercial

Commercial segment sales increased 16.4 percent to $243.7 million in the fourth quarter of fiscal 2014. The increase in sales was primarily attributable to a nearly 21 percent increase in concrete mixer unit volume.

Commercial segment operating income increased 17.3 percent to $18.4 million, or 7.6 percent of sales, for the fourth quarter of fiscal 2014 compared to $15.7 million, or 7.5 percent of sales, in the fourth quarter of fiscal 2013. The increase in operating income was primarily a result of higher sales volume.

Access Equipment

Access equipment segment sales increased 19.5 percent to $932.7 million for the fourth quarter of fiscal 2014. The improvement was principally the result of the continued recovery of the global access equipment market, offset in part by the absence of U.S. military telehandler sales under a contract that was completed in the fourth quarter of fiscal 2013. Sales of access equipment excluding U.S. military telehandler sales1 in fiscal 2013 rose 22.4 percent in the fourth quarter of fiscal 2014.

Access equipment segment operating income increased 56.9 percent to $127.4 million, or 13.7 percent of sales, for the fourth quarter of fiscal 2014 compared to $81.2 million, or 10.4 percent of sales, in the fourth quarter of fiscal 2013. Included in access equipment results for the fourth quarter of fiscal 2013 was a $9.0 million non-cash intangible asset impairment charge. Excluding the impairment charge, adjusted1 operating income in the fourth quarter of fiscal 2013 was $90.2 million, or 11.6 percent of sales. The increase in adjusted operating income was primarily the result of higher sales volume and the favorable impact of cost reduction initiatives, offset in part by increased new product development spending and higher operating costs.

Defense

Defense segment sales for the fourth quarter of fiscal 2014 decreased 43.9 percent to $288.1 million. The decrease in sales was expected and was primarily due to lower sales to the U.S. Department of Defense (DoD). Sales in the fourth quarter of the prior year also included revenue associated with the delivery of international MRAP All-Terrain Vehicles and Joint Light Tactical Vehicle (JLTV) test vehicles under the JLTV Engineering, Manufacturing & Development contract that did not occur in the fourth quarter of fiscal 2014.

The defense segment reported an operating loss of $2.0 million, or 0.7 percent of sales, for the fourth quarter of fiscal 2014 compared to operating income of $11.2 million, or 2.2 percent of sales, in the fourth quarter of fiscal 2013. Included in defense segment results for the fourth quarter of fiscal 2014 were $3.8 million of pension curtailment and pension settlement charges. Included in defense segment results for the fourth quarter of fiscal 2013 were costs of $3.8 million related to the extension of a union contract with production employees. Excluding these items, adjusted1 operating income was $1.8 million, or 0.6 percent of sales, in the fourth quarter of fiscal 2014 compared to $15.0 million, or 2.9 percent of sales, in the fourth quarter of the prior year. The decrease in adjusted operating income was largely due to lower sales volume, offset in part by favorable warranty experience as well as lower engineering costs and operating expenses.

Fire & Emergency

Fire & emergency segment sales for the fourth quarter of fiscal 2014 decreased 7.4 percent to $214.9 million. The decrease in sales primarily reflected lower fire apparatus deliveries as a result of production delays and higher prior year international fire apparatus sales.

Fire & emergency segment operating income increased 35.3 percent to $12.5 million, or 5.8 percent of sales, for the fourth quarter of fiscal 2014 compared to $9.2 million, or 4.0 percent of sales, in the fourth quarter of fiscal 2013. The increase in operating income was primarily the result of favorable product mix and lower operating expenses, offset in part by the lower sales volume.

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