* Raises FY adj EPS forecast to $2.80-$3.05 from $2.35-$2.60
* First-quarter adj earnings per share $0.60 vs est $0.31
* Defense operating margins better than expected
* Access equipment sales up 15 pct
* Shares soar 17 percent to touch a 3-year high
By Bijoy Anandoth Koyitty
Jan 25 Oshkosh Corp raised its full-year
earnings outlook after its first-quarter profit handily beat
analysts' expectations on higher revenue from access equipment
products such as aerial work platforms and boom lifts.
Shares of the company rose 17 percent to a three-year high
of $40.40 on Friday.
Oshkosh forecast adjusted earnings from continuing
operations of $2.80 to $3.05 per share for the year ending
September, and said an improving construction market would drive
growth in the access equipment business in 2013.
The company, which makes tactical vehicles for defense,
specialty trucks for construction, and emergency vehicles such
as ambulances and fire trucks, shrugged off activist investor
Carl Icahn's second overture to take control last October.
Icahn abandoned his effort to take control of Oshkosh in
December, and has considerably reduced his stake since then.
Icahn held a 4.66 percent stake in Oshkosh as of Dec. 13, down
from 9.5 percent.
The company reported a profit of $46.2 million, or 51 cents
per share, for the first quarter ended Dec. 31. It earned $38.9
million, or 43 cents per share, a year earlier.
Excluding items, earned 60 cents per share.
Total sales fell 6 percent to $1.76 billion.
Access equipment sales rose more than 15 percent, helped by
strong volumes in North America, higher prices and improved
The company said the access equipment business, which
contributes about 33 percent to total revenue, received its
second-biggest number of orders in a quarter since fiscal 2007.
DEFENSE MARGINS SURPRISE
First-quarter sales in the defense business -- Oshkosh's
largest -- fell 21 percent. However, the business reported
operating margins of 7.5 percent, higher than Street
"What was surprising was that profitability in the defense
business was probably twice what we expected," Longbow Research
analyst Eli Lustgarten said.
Oshkosh has reduced its exposure to the defense market,
which once contributed nearly 60 percent to sales, following
spending cuts by U.S. government.
The company attributed the impressive margin performance to
"favorable adjustments on some contracts and warranty", and
improved operational efficiency in its defense plants.
Oshkosh announced plans in October to cut 490 defense jobs.
"We are in very good shape through most of fiscal 2014 from
a domestic sales outlook standpoint ... but the concerns are
still there, they are valid," Chief Executive Charles Szews said
on a conference call with analysts.
Shares of the Oshkosh, Wisconsin-based company were up 15
percent at $39.64 in afternoon trade.
Shares of rival Terex Corp were up 10 percent at
$31.15 on the New York Stock Exchange.