10-K: Oshkosh Navigates Trade Headwinds, Boosts Dividend & NGDV Production

Oshkosh Corporation reported solid 2025 earnings per share of $10.02 despite a dynamic international trade environment and anticipates continued growth in 2026 with increased NGDV production and a higher dividend.

Summary

• Diluted earnings per share for 2025 was $10.02.
• Consolidated net sales decreased by 2.9% to $10,422.3 million in 2025 compared to $10,730.2 million in 2024.
• Consolidated operating income decreased by 7.0% to $939.5 million in 2025 compared to $1,010.7 million in 2024.
• Access segment sales declined by 13.0% due to softer market conditions and the expiration of a telehandler agreement.
• Vocational segment sales increased by 12.6% due to higher production rates and improved pricing, with operating income margin rising to 14.7%.
• Transport segment sales decreased by 2.7% primarily due to lower JLTV sales volume, partially offset by a 352% increase ($365 million) in Next Generation Delivery Vehicle (NGDV) sales.
• Cash flows from operations increased by $233 million to $783 million in 2025, driven by customer advances and lower tax payments.
• Tariffs cost the company approximately $35 million in 2025.
• The One Big Beautiful Bill Act (OBBBA), enacted in July 2025, lowered tax payments by approximately $90 million.
• Repurchased 2.3 million shares of Common Stock for $278 million in 2025.
• Increased the quarterly dividend rate by 11.8% to $0.57 per share, effective Q1 2026.

Sentiment

Score: 6

Explanation: StockSavvy.ai views this as a moderately positive filing. While 2025 saw a slight dip in consolidated sales and operating income, the company demonstrated resilience with strong cash flow generation, a significant dividend increase, and strategic acquisitions. The 2026 outlook projects growth, albeit with notable headwinds from tariffs and a softening Access segment, suggesting a cautious but forward-looking stance.

Positives

• Achieved solid 2025 diluted earnings per share of $10.02.
• Increased Next Generation Delivery Vehicle (NGDV) production rates, leading to a 352% sales increase ($365 million) in 2025 compared to 2024.
• Vocational segment sales grew by 12.6% and its operating income margin improved by 270 basis points to 14.7% in 2025.
• Cash flows from operations significantly increased by $233 million to $783 million in 2025, bolstered by customer advances and lower tax payments.
• The One Big Beautiful Bill Act (OBBBA) resulted in approximately $90 million in lower tax payments in 2025.
• Repurchased 2.3 million shares for $278 million in 2025, contributing $0.19 to earnings per share compared to 2024.
• Increased the quarterly dividend rate by 11.8% to $0.57 per share, marking the twelfth consecutive year of double-digit percentage dividend growth.
• Maintained an investment-grade credit rating from Fitch (BBB), Moody's (Baa3), and S&P (BBB).
• Demonstrated strong market positions and brand recognition, including being a sole-source supplier for several key U.S. Department of Defense (DoD) vehicle platforms.
• Continued innovation in advanced technologies such as autonomy, artificial intelligence, connectivity, and electrification, with new zero-emission solutions launched across all segments.
• Completed strategic acquisitions of AUSA ($114.5 million in September 2024), AeroTech ($804.6 million in August 2023), and Hinowa ($186.8 million in January 2023) to expand portfolio and technological capabilities.
• Management's assessment confirmed effective internal control over financial reporting as of December 31, 2025.

Negatives

• Consolidated net sales decreased by 2.9% to $10,422.3 million in 2025 compared to 2024.
• Consolidated operating income decreased by 7.0% to $939.5 million in 2025 compared to 2024.
• Access segment net sales decreased by 13.0% due to softer market conditions and the expiration of a telehandler agreement, leading to a 440 basis point decline in operating income margin to 11.2%.
• Transport segment net sales decreased by 2.7% primarily due to lower sales volume of the Joint Light Tactical Vehicle (JLTV) following contract completion.
• Tariffs incurred approximately $35 million in costs in 2025, with an estimated increase to $200 million in 2026.
• Higher labor and overhead costs (100 basis points impact on gross margin) and increased warranty expense ($37 million) negatively affected consolidated operating income.
• Impaired the remaining Pratt Miller goodwill by $5.7 million in 2025 due to a further decline in expected future performance.
• Deferred contract costs for the NGDV contract exceed future profits on existing orders by approximately $135 million at December 31, 2025.
• The ramp-up of NGDV production has taken longer and cost more than anticipated, resulting in lower revenues and higher costs than expected.
• Consolidated days sales outstanding increased from 40 days in 2024 to 43 days in 2025.
• Consolidated inventory turns decreased from 3.9 times in 2024 to 3.6 times in 2025.
• The 2026 outlook projects a 7.0% decrease in Access segment sales and a decline in its operating income margin to 9.7%.

Risks

• Markets are highly cyclical, particularly access equipment, fire apparatus, refuse/recycling collection, and air transportation equipment, which are impacted by U.S. and European economies and construction outlooks.
• Performance under the U.S. Postal Service (USPS) Next Generation Delivery Vehicle (NGDV) contract may not meet expectations, with risks of fewer unit orders, production delays, higher costs, warranty issues, and contract termination.
• Changes in trade policies, including tariffs (estimated $200 million in 2026), and geopolitical tensions could disrupt supply chains, increase product costs, and reduce demand.
• Capacity expansion plans may take longer or cost more than expected, or may not achieve anticipated benefits due to construction delays, labor shortages, supply chain constraints, and cost inflation.
• Fluctuations in prices of raw materials (steel, aluminum, copper) and other inputs can adversely impact results, especially for orders in backlog with fixed prices.
• Dependence on third-party suppliers makes the company vulnerable to supply shortages, price increases, and quality issues.
• Labor issues, including availability of skilled workforce, absenteeism, and strikes, could disrupt production and increase costs.
• Dependency on U.S. and foreign government contracts (approximately 20% of 2025 net sales) subjects the company to risks such as intense competition, budget uncertainty, contract delays/terminations, and audits.
• The U.S. government has become more aggressive in seeking to acquire design rights to facilitate competition for military vehicle manufacturing.
• Severe weather, natural disasters, or other events could disrupt operations, supply chains, or customer activities.
• Consolidation within customer and dealer bases may increase their leverage, impacting pricing and product margins.
• Disruptions within the dealer network, including difficulties in dealer operations or termination of relationships, could adversely affect business.
• Significant competition from specialized and mass producers, with some competitors possessing greater financial, marketing, manufacturing, distribution, and governmental affairs resources.
• Failure to successfully identify, complete, and integrate acquisitions or realize anticipated benefits.
• Inability to continuously enhance existing products and develop new products (e.g., electric-powered vehicles) that meet evolving customer needs and preferences.
• Fluctuations in foreign currency exchange rates could adversely affect sales and profits, and impact the comparability of results between financial periods.
• Challenges in expanding international operations and sales due to political/economic instability, tariffs, foreign regulations, and logistical requirements.
• Risks associated with the development, integration, and use of artificial intelligence (AI) and autonomy technologies, including performance issues, safety incidents, reputational harm, and evolving regulatory frameworks.
• Changes in contract estimates for long-term contracts, particularly in the Transport segment, can significantly impact profitability (e.g., negative $37.9 million impact on operating income in 2025 from cumulative catch-up adjustments).
• Potential for losses in excess of recorded reserves for doubtful accounts and guarantees of indebtedness of others, especially during periods of economic weakness.
• An impairment in the carrying value of goodwill and other indefinite-lived intangible assets could negatively affect operating results (78% concentrated in JLG).
• Financing costs and restrictive covenants in debt facilities could limit flexibility and increase vulnerability to adverse economic conditions.
• Additional liabilities relating to changes in tax rates or exposure to additional income tax liabilities could adversely impact financial condition and cash flow.
• Increased cybersecurity threats and sophisticated computer crime pose risks to systems, networks, operations, products, and services, potentially leading to reputational damage, litigation, and financial costs.
• International sales and operations subject the company to the Foreign Corrupt Practices Act (FCPA) and export control regulations.
• Potential for material expenditures or liabilities to comply with changes in environmental laws or climate change regulations.

Future Outlook

Consolidated sales are estimated to reach approximately $11.0 billion in 2026, up from $10.4 billion in 2025. Consolidated operating income is projected to be around $1.06 billion, leading to an estimated diluted earnings per share of $10.90, or $11.50 excluding intangible asset amortization. Tariff costs are expected to increase significantly to approximately $200 million in 2026 from $35 million in 2025. Access segment sales are anticipated to decrease by about 7.0% to $4.2 billion in 2026, with operating income margin declining to 9.7% due to fixed costs and lower sales. Vocational segment sales are expected to grow by approximately 13.0% to $4.2 billion, with operating income margin improving to 16.1% due to increased production and favorable price/cost dynamics. Transport segment sales are projected to increase by about 19% to $2.5 billion, driven by improved pricing and a progressive ramp-up in NGDV production, with operating margin at 4.0%. A follow-on NGDV delivery order from the USPS is contemplated, which would result in a favorable cumulative catch-up adjustment. First quarter 2026 earnings per share are expected to be approximately $0.85, reflecting tariff impacts, expected continued softer market conditions in access equipment, and seasonality.

Management Comments

• "The Company believes that certain statements in Business and Managements Discussion and Analysis of Financial Condition and Results of Operations and other statements located elsewhere in this Annual Report on Form 10-K are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995."
• "The Company believes its broad product portfolios and diverse end markets serve to diversify its sources of revenue, reduce exposure to economic cycles and provide multiple avenues for both organic and inorganic growth."
• "The Company believes its product portfolios unlock significant potential to share innovation and technology within and across segments, bundle solutions for customers and maximize the Company's purchasing power."
• "The Company believes its advanced design and engineering capabilities have contributed to the development of innovative, purpose-built solutions that elevate performance, reduce total cost of ownership and deepen customer loyalty."
• "The Company believes its purpose-built manufacturing approach gives it a distinct competitive edge over larger vehicle manufacturers due to the Company's ability to deliver flexibility, manage supply chains effectively and tailor products to meet customer specifications."
• "The Company believes its dedication to keeping its products operational in demanding conditions worldwide has contributed to customer loyalty."
• "The Company believes its People First culture is a strength, and the Company intends to continue building upon that culture to foster innovation and drive long-term, sustainable performance across the business."
• "The Company believes that its competitive cost structure, strategic global purchasing capabilities, engineering expertise, product quality and global distribution and service systems have enabled it to compete effectively."
• "Management, however, believes that any losses in excess of established reserves will not have a material effect on the Companys financial condition, results of operations or cash flows."
• "Management, however, believes that the ultimate resolution of all such matters and claims will not have a material effect on the Companys financial condition, results of operations or cash flows."

Industry Context

StockSavvy.ai notes that Oshkosh's performance reflects broader industry trends, including the cyclical nature of construction and industrial equipment markets, which are sensitive to economic strength. The company's strategic focus on advanced technologies like electrification and autonomy aligns with the growing demand for sustainable and efficient solutions across its diverse end markets (construction, firefighting, aviation, defense, delivery). The significant increase in NGDV production for the USPS highlights the ongoing modernization efforts in government fleets, while the decline in JLTV sales underscores the inherent contract-based volatility in the defense sector. The impact of tariffs and global trade policies is a pervasive challenge for multinational manufacturers, requiring agile supply chain management and pricing strategies.

Comparison to Industry Standards

• In the Access segment, JLG competes with major multinational construction equipment manufacturers like Genie Industries (Terex Corporation), Skyjack Inc. (Linamar Corporation), Haulotte Group, Xuzhou Construction Machinery Group Co., Ltd. (XCMG), and Zhejiang Dingli Machinery Co., Ltd. for aerial work platforms and telehandlers. JLG's product residual values are generally higher than those of its competitors.
• For municipal fire apparatus, Pierce and Maxi-Metal compete against Rosenbauer International AG and REV Group, Inc. (a subsidiary of Terex Corporation). Pierce leverages its nationwide dealer network and proprietary technologies such as the Pierce Ultimate Configuration (PUC), TAK-4 independent suspension system, Hercules and Husky foam systems, Command Zone electronics, Volterra parallel-electric drivetrain, and the Ascendant family of aerial fire trucks to maintain a competitive edge.
• Oshkosh AeroTech competes with TLD Group and ITW GSE Inc. for ground support equipment, and with China International Marine Containers (Group) Co., Ltd. and TK Elevator for passenger boarding bridges.
• Oshkosh Airport Products faces competition from Rosenbauer International AG and Albert Ziegler GmbH in the Aircraft Rescue and Firefighting (ARFF) vehicle market.
• In the refuse and recycling collection vehicles market, McNeilus competes with Environmental Solutions Group (a subsidiary of Terex Corporation), New Way Trucks (a subsidiary of Federal Signal), and Labrie Enviroquip Group. McNeilus differentiates itself by offering fully integrated electric refuse and recycling collection vehicles.
• IMT's principal competitors for field service vehicles include Auto Crane Company (owned by Ramsey Industries, Inc.), Stellar Industries, Inc., Maintainer Corporation of Iowa, Inc., and The Knapheide Manufacturing Company. For truck-mounted cranes, it competes primarily with European companies such as Palfinger AG, Cargotec Corporation, and Fassi Group SpA.
• Oshkosh S-Series competes with Terex Corporation in the front-discharge concrete mixer market.
• Oshkosh Defense competes in the defense marketplace with companies like AM General LLC (a subsidiary of KPS Capital Partners, LP), American Rheinmetall Vehicles, BAE Systems plc, General Dynamics Corporation, GM Defense LLC, Mack Defense LLC, and ND Defense LLC (a subsidiary of Cerberus Capital Management, LP).
• For postal delivery vehicles, the company competes with Utilimaster (a subsidiary of Aebi Schmidt Group), Morgan Olson (a subsidiary of JB Poindexter & Co., Inc.), and Rivian Automotive Inc.

Management Changes

Corporate Governance

Legal Proceedings

• Subject to environmental matters and legal proceedings and claims, including patent, antitrust, product liability, warranty, and state dealership regulation compliance proceedings that arise in the ordinary course of business.
• Estimated net liabilities for product and general liability claims totaled $53.0 million at December 31, 2025.
• Management believes that the ultimate resolution of all such matters and claims will not have a material effect on the company's financial condition, results of operations, or cash flows.
• No appeals are pending with the Armed Services Board of Contract Appeals or the U.S. Claims Court regarding firm, fixed-price contracts with the U.S. government.
• As a U.S. government contractor, operations are subject to extensive annual audit processes and investigations of business practices and cost classifications, which could result in legal or administrative proceedings, fines, suspension, or debarment; however, the company believes current audits will not have a material effect.

Stakeholder Impact

• Shareholders: Impacted by solid 2025 EPS, an 11.8% dividend increase, and ongoing share repurchases, alongside potential future growth in 2026 sales and EPS, but also risks from tariffs and a projected decline in the Access segment.
• Employees: The company maintains a 'People First' culture, prioritizing safety, engagement, wellbeing, and professional development. Over 18,400 employees globally, with approximately 13% of U.S. employees represented by unions. Employees logged 246,000 learning hours in 2025.
• Customers: Benefit from innovative, purpose-built solutions, advanced technologies (autonomy, AI, connectivity, electrification), and strong lifecycle support. Increased NGDV production for the USPS and higher production in the Vocational segment aim to meet customer demand.
• Suppliers: Face potential impacts from supply chain disruptions, price increases, and trade policy changes (tariffs). The company actively works with suppliers to mitigate these effects through sourcing diversification and cost-containment initiatives.
• U.S. Government/DoD/USPS: A significant customer, accounting for 20% of 2025 sales. Impacted by NGDV contract performance, the completion of the JLTV contract, and potential future contract competitions and budget uncertainties.
• Communities: The company's teams volunteered over 20,800 hours in 2025, demonstrating a commitment to community engagement and charitable giving.

Next Steps

• Continue to increase production rates for Next Generation Delivery Vehicles (NGDV) for the USPS.
• Deliver on backlog in the Vocational segment, reflecting expected increases in production volume and improved pricing.
• Receive a follow-on NGDV delivery order from the USPS, which is expected to result in a favorable cumulative catch-up adjustment.
• Manage the impact of an estimated $200 million in tariffs in 2026.
• Invest approximately $200 million in capital expenditures in 2026, prioritizing capacity and strategic investments.
• Continue share repurchases under the existing authorization of 7,945,869 shares.
• Pay increased quarterly dividend of $0.57 per share starting Q1 2026.
• Address the cyclical nature of markets and potential for continued softer market conditions in the Access segment.
• Monitor and mitigate risks related to supply chain disruptions, labor availability, and government contract uncertainties.
• Evaluate the impact of new accounting standards (ASU 2024-03, ASU 2025-06, ASU 2025-10) on future financial statements.

Key Dates

Recommendation

Oshkosh Corporation presents a mixed but resilient picture. While 2025 saw a slight dip in consolidated sales and operating income, the company delivered solid EPS, increased its dividend, and continued strategic acquisitions. The 2026 outlook projects growth, driven by the Vocational segment and NGDV ramp-up, but is tempered by significant tariff headwinds and anticipated softness in the Access segment. The company's strong market positions, innovation in electrification and autonomy, and robust cash flow are positives. However, the cyclical nature of its markets, ongoing supply chain risks, and the substantial increase in projected tariff costs for 2026 introduce considerable uncertainty. A 'Hold' recommendation reflects the balance between these strengths and challenges, suggesting investors monitor the execution of NGDV production, tariff mitigation strategies, and the performance of the Access segment.

Keywords

Purpose-built vehicles, Access equipment, Fire apparatus, Refuse collection, Defense vehicles, Delivery vehicles, JLG, Oshkosh Defense, USPS NGDV, Electrification, Autonomy, AI, Manufacturing, Industrial technology, Government contracts, Heavy equipment, Specialty vehicles, Aerial work platforms, Telehandlers, Truck-mounted cranes, Airport ground support equipment, ARFF vehicles, Concrete mixers, Tactical wheeled vehicles, Supply chain, Tariffs, Dividends, Share repurchases