Oshkosh Corp., a maker of blast-resistant military trucks, said its first-quarter profit fell 61 percent as sales to the U.S. Defense Department declined. The results beat expectations.
Net income dropped to $38.9 million, or 42 cents a share, in the quarter ended Dec. 31, from $99.6 million, or $1.09 a share, in the year-earlier period, the company said in a statement. Excluding some items, per-share profit was 37 cents, exceeding the 34-cent average estimate of 12 analysts surveyed by Bloomberg.
Revenue rose 10.5 percent to $1.88 billion in the quarter from $1.7 billion a year earlier.
The company said it expected a better performance next year. Improving cost structure, new products and increasing sales in emerging markets “will deliver earnings growth in 2013 and beyond,” Chief Executive Officer Charles Szews said in a statement.
Shareholders on Jan. 27 rejected billionaire investor Carl Icahn’s challenge to install six candidates on the 13-member board of directors. In a separate filing today, the company also said all 13 of its nominees were elected, citing preliminary results. One seat previously had been too close to call. The dispute cost 2 cents a share in the quarter, Oshkosh said.
“With the proxy fight behind the company’s management, we believe that the focus will be on growth opportunities,” Walter Liptak, an analyst with Barrington Research Associates Inc. in Chicago, said yesterday in a note to investors.
Oshkosh, based in the Wisconsin city of the same name, fell 71 cents, almost 3 percent, closing at $24.28 in New York trading. The shares dropped 39 percent in 2011.
Icahn, 75, has criticized Oshkosh’s performance and management. He suggested selling its JLG construction-equipment business and merging Oshkosh with another truck maker, Navistar International Corp. of Lisle, Illinois. Last year, Icahn announced a 9.5 percent stake in Oshkosh and a 9.8 percent stake in Navistar.
Charles Brady, an analyst with BMO Capital Markets Corp. in Boston, said in a Jan. 27 note to clients the election results were a “significant win for Oshkosh and a repudiation of Carl Icahn.” He said Icahn will probably sell his shares of Oshkosh. He rates the company as “outperform.”
“This was a solid quarter for Oshkosh and results were mostly better than expected,” Brady said today in a separate note.
The company reported a $4 million profit in the quarter on a U.S. Army contract valued at more than $3 billion to build trucks and trailers for the Family of Medium Tactical Vehicles, or FMTV, three months earlier than expected.
Chief Financial Officer David Sagehorn, who led the conference call instead of Szews, who was out sick, said FMTV sales accounted for about 30 percent, or $315 million, of quarterly defense revenue. He said the program’s profit margin, which amounts to about 1.3 percent, may “tick up a little bit over the remaining quarters of the year,” with more movement in fiscal 2013.
Sales at two of Oshkosh’s four units rose during the quarter, led by a 74 percent increase to $505 million in external customer sales of access equipment segment, which includes aerial lift platforms and tow trucks, the company said.
Revenue in the commercial unit, which makes concrete mixers and garbage trucks, rose 44 percent to $172 million. Defense fell 6 percent to $1.05 billion, and fire and emergency fell 19 percent to $163 million.