Oshkosh Corp

Third-quarter 2026 consolidated sales were $2.8 billion, up $153 million, or 5.7%, versus last year. Adjusted EPS was $2.41. Adjusted operating income was $217 million, down $57 million year over year. Free cash flow was $275 million in the quarter and $433 million year to date. Access sales were $1.3 billion, up 21%, with adjusted operating margin of 11.2%. Vocational sales were $900 million, down $68 million, with adjusted operating margin of 11.4%. Transport sales were $562 million, down $26 million, with operating income of $8 million. For 2026, Oshkosh now expects adjusted EPS of $8.50-$9.50, consolidated revenue of approximately $11 billion, adjusted operating income of approximately $850 million, and free cash flow of $600 million-$700 million. Segment guidance includes Access revenue of $4.8 billion and margin of approximately 9.75%, Vocational revenue of approximately $3.7 billion and margin of 12.5%, and Transport revenue of approximately $2.3 billion with a margin of approximately 4%. Management said the lower end of EPS guidance reflects the possibility that an additional NGDV order slips into 2027 rather than 2026, and noted that a USPS follow-on order could affect Q4 earnings by up to about $40 million, or $0.50 per share.

John Pfeifer said the quarter was hurt mainly by near-term fire truck production issues, but argued the company is in the middle of a necessary transformation toward high-flow manufacturing at Pierce. He emphasized that the company has a multi-year backlog, strong demand, and a clearer understanding of the material-flow problems, and he expects the new process to support stable production about 10% above last year once implemented. His tone was candid but confident, especially on the long-term targets of 25%-30% growth through 2028 and broader strength across Access, Vocational, and Transport.

Matt Field highlighted the reported numbers and said lower Vocational volume and mix pressure drove the year-over-year decline in adjusted operating income. He pointed to robust cash generation, with $275 million of free cash flow in Q3 and $433 million year to date, supported by disciplined working capital management, higher customer advances, and improved inventory management. He also noted the company repurchased about 556,000 shares for $82 million and said Moody’s upgraded the credit rating to Baa2. On guidance, he said the company now expects free cash flow of $600 million-$700 million and reiterated that the NGDV timing could move EPS by about $0.50 in Q4 if the order slips.

Analysts focused heavily on whether the fire truck issues were a short-term hiccup or a deeper manufacturing problem. Management said the problem is not a demand issue but a production-system transformation issue, centered on parts flow, routing, digitization, and supplier/material buffers; they said they expect Q4 stabilization and 10% higher production in 2027. Questions also centered on NGDV timing and margins, with management saying production should move from the low end of the 16,000-20,000 annualized range toward the high end by mid-2027 and that 2028 margins should be in the 10% range. On Access, management said strong mega-project-driven demand and the $2 billion of quarterly orders support healthy incrementals, while on Vocational they said refuse is stabilizing but not yet 'off to the races.'