Oshkosh Corporation's Q4 2024: Navigating Contradictions in Access Market Demand, Defense Margins, and Business Outlook

These are the key contradictions discussed in Oshkosh Corporation's latest 2024Q4 earnings call, specifically including: Access market outlook and demand patterns, Defense margin trajectory, Access business outlook and margin expectations, Vocational business growth expectations, Access segment performance, and Defense segment margin trajectory:



Strong Performance in Vocational Segment:
- Oshkosh Corporation's Vocational segment achieved strong year-over-year revenue growth of nearly 20% in the fourth quarter, with a robust adjusted operating income margin of 14%.
- This growth was driven by increased volume, strong price realization, and a healthy backlog, which provides excellent visibility into demand.

Access Segment Outlook:
- The company reported Access equipment sales moderate due to softer non-residential construction activity and elevated interest rates, with expectations for lower sales in 2025, particularly in the first half.
- The decline in revenue is partly due to more volume decline than price, reflecting market softness and traditional seasonality, particularly in the first and fourth quarters.

NGDV Program and Production:
- Oshkosh anticipates a ramp-up in the production of the next-generation delivery vehicle (NGDV) program, with full rate production expected by the end of 2025.
- This ramp-up is expected to provide strong revenue growth in 2025 and into 2026, supporting the company's outlook for profitable growth in future years.

Defense Segment Expectations:
- Oshkosh expects improved pricing terms on tactical wheeled vehicle programs and the launch of the NGDV to boost Defense segment performance.
- Better pricing and the ramp-up of NGDV production are anticipated to improve the resiliency of margins over time, contributing to growth opportunities.