It has been about a month since the last earnings report for Oshkosh (OSK). Shares have added about 10.3% in that time frame, outperforming the S&P 500.
But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is Oshkosh due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the latest earnings report in order to get a better handle on the important drivers.
OSK Q2 Earnings Beat
Oshkosh reported second-quarter 2026 adjusted earnings of $2.87 per share, down 15.8% year over year. Earnings, however, beat the Zacks Consensus Estimate of $2.60 by 10.39%. Consolidated adjusted operating income declined 17.7% to $257.6 million, while adjusted operating margin fell to 8.8% from 11.5%. Unfavorable sales mix and higher manufacturing overhead costs impacted the results.
Revenues rose 6.7% to $2.92 billion and beat the consensus mark of $2.75 billion by 6.18%. Higher sales volume and improved pricing supported the top line. Period-end backlog reached $14.75 billion, led by sizable Vocational and Transport order books.
Access Sales Rise on Strong Orders
Access segment sales increased 9.4% year over year to $1.37 billion, driven by higher sales volume and improved pricing. Aerial work platform revenues rose to $735.1 million from $638 million, while telehandler revenues declined to $263.3 million from $325.1 million.
Adjusted operating income fell to $155.8 million from $185.7 million. Adjusted operating margin contracted to 11.3% from 14.8% due to adverse product and customer mix, unfavorable price-cost dynamics, higher litigation reserves, increased selling and administrative costs, and greater product-development spending. Higher sales volume partly offset these pressures.
Orders reached $1.5 billion and backlog was $1.96 billion at the end of the quarter, supported by infrastructure projects, data centers and other large construction developments.
Vocational Margin Faces Pressure
Vocational segment sales were nearly flat at $966.8 million. Higher municipal fire apparatus and airport product revenues were offset by lower refuse and recycling vehicle sales.
Adjusted operating income declined to $130.5 million from $157.9 million, with margin contracting to 13.5% from 16.3%. Adverse sales mix, higher manufacturing overhead and lower volume outweighed improved price-cost dynamics and lower incentive compensation accruals.
Fire truck shipments were roughly level with the prior-year quarter. Oshkosh expects production to increase about 10% in 2026 as it shifts from bay-based assembly to higher-flow production lines, though material-flow changes are taking longer than initially planned.
Transport Revenues Gain on NGDV Ramp
Transport segment sales rose 11.9% to $536.1 million. Delivery vehicle revenues increased to $261.6 million from $107.1 million as production of the Next Generation Delivery Vehicle accelerated. Defense revenues fell to $274.5 million from $372 million.
Operating income decreased to $15.8 million from $17.8 million. Adverse mix and higher warranty and manufacturing overhead costs offset a $16.6 million one-time benefit tied to the NGDV program. Management expects margins to improve in the second half as NGDV production rises and revised defense contracts contribute.
Strong Free Cash Flow
Second-quarter free cash flow reached $348 million, up sharply from $49 million a year ago. The company repurchased about 667,000 shares for $92 million during the quarter. OSK declared a quarterly dividend of 57 cents per share, to be paid out on Aug. 27, 2026, to shareholders of record as of Aug. 13.
OSK Cuts Earnings Outlook on Fire Truck Ramp
Oshkosh now expects 2026 adjusted earnings of about $11 per share, down roughly 50 cents from its prior guidance. The revision reflects slower-than-expected improvement in fire truck production, more than offsetting the stronger outlook for the Access segment.
The company raised its full-year sales expectation by $200 million and continues to project free cash flow of $550-$650 million. Management expects fourth-quarter results to exceed third-quarter performance as fire truck production improves, NGDV output rises and defense work shifts to revised-price contracts.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
VGM Scores
Currently, Oshkosh has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a score of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Oshkosh has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Oshkosh belongs to the Zacks Automotive - Domestic industry. Another stock from the same industry, Tesla (TSLA), has gained 15.9% over the past month. More than a month has passed since the company reported results for the quarter ended June 2026.
Tesla reported revenues of $28.24 billion in the last reported quarter, representing a year-over-year change of +25.5%. EPS of $0.33 for the same period compares with $0.40 a year ago.
Tesla is expected to post earnings of $0.47 per share for the current quarter, representing a year-over-year change of -6%. Over the last 30 days, the Zacks Consensus Estimate has changed +0.3%.
Tesla has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of D.
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This article originally published on Zacks Investment Research (zacks.com).