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Specialty vehicles contractor Oshkosh (NYSE:OSK) missed Wall Street’s revenue expectations in Q1 CY2025, with sales falling 9.1% year on year to $2.31 billion. Its non-GAAP profit of $1.92 per share was 5.9% below analysts’ consensus estimates.

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Oshkosh (OSK) Q1 CY2025 Highlights:

• Revenue: $2.31 billion vs analyst estimates of $2.42 billion (9.1% year-on-year decline, 4.5% miss)

• Adjusted EPS: $1.92 vs analyst expectations of $2.04 (5.9% miss)

• Adjusted EBITDA: $245.4 million vs analyst estimates of $249.9 million (10.6% margin, 1.8% miss)

• Operating Margin: 7.6%, down from 10.2% in the same quarter last year

• Free Cash Flow was -$435.2 million compared to -$455.9 million in the same quarter last year

• Backlog: $14.55 billion at quarter end, down 11% year on year

• Market Capitalization: $6.45 billion

StockStory’s Take

Oshkosh’s first quarter results were influenced by softness in the Access segment and ongoing strength in Vocational, while management highlighted that emerging tariff impacts have become a primary focus. CEO John Pfeifer pointed to resilient operational execution within Vocational and early ramp-up progress for the Next Generation Delivery Vehicle (NGDV) in Defense, while acknowledging Access faced volume headwinds. The company attributed the quarter’s margin pressure to higher operating expenses and increased new product development spending, partially offset by improved pricing in Vocational.

Looking ahead, management is prioritizing mitigation of newly announced tariffs, which they estimate could have up to a $1 per share impact for the year, mostly in the back half. Pfeifer emphasized, “We are proactively working to mitigate potential impacts from tariffs,” and CFO Matt Field clarified that most of the burden will fall on the Access segment, with cost actions and supply chain adjustments planned to offset about half of the hit. Management maintained confidence in achieving full-year profit targets, excluding tariff impacts, and expects a stronger second half as Defense ramps NGDV production and Vocational investments continue to pay off.

Key Insights from Management’s Remarks

Oshkosh’s leadership focused on the interplay between segment-specific performance and external pressures, especially tariffs. Management described how operational changes, supply chain shifts, and product introductions contributed to the quarter’s results.

• Vocational Segment Momentum: The Vocational segment achieved notable year-over-year growth, driven by higher refuse and recycling vehicle sales, robust pricing, and improved manufacturing productivity. Management cited recent investments in production and a new dealer network as key contributors.

• Access Segment Resilience Amid Headwinds: Despite lower sales in Access, management reported resilient margins due to cost controls and pricing power. The segment continues to benefit from mega projects and infrastructure spending, with a stable backlog and no significant order cancellations observed.

• Tariffs and Supply Chain Mitigation: Newly announced tariffs are expected to impact primarily the Access segment. Management is implementing targeted mitigation through supply chain adjustments and negotiations, referencing prior success in localizing production in response to European tariffs.

• Defense Segment Ramp-Up: The Defense segment is progressing toward full-rate NGDV production for the United States Postal Service, with sequential margin improvement expected across the year. Orders from the U.S. Army and international customers, such as the Netherlands, support the longer-term outlook.

• Product and Technology Innovation: Oshkosh continues to introduce new products, including electric vehicles and integrated telematics solutions, and highlighted customer demand for advanced technologies in both fire and airport equipment. These initiatives are positioned as key differentiators supporting future growth.