Specialty vehicles contractor Oshkosh (NYSE:OSK) announced better-than-expected revenue in Q4 CY2025, with sales up 2.5% year on year to $2.69 billion. The company’s full-year revenue guidance of $11 billion at the midpoint came in 0.7% above analysts’ estimates. Its non-GAAP profit of $2.26 per share was 2.2% below analysts’ consensus estimates.
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Oshkosh (OSK) Q4 CY2025 Highlights:
- Revenue: $2.69 billion vs analyst estimates of $2.62 billion (2.5% year-on-year growth, 2.6% beat)
- Adjusted EPS: $2.26 vs analyst expectations of $2.31 (2.2% miss)
- Adjusted EBITDA: $284.2 million vs analyst estimates of $281.5 million (10.6% margin, 1% beat)
- Adjusted EPS guidance for the upcoming financial year 2026 is $11.50 at the midpoint, missing analyst estimates by 6.7%
- Operating Margin: 7.9%, in line with the same quarter last year
- Backlog: $14.18 billion at quarter end, in line with the same quarter last year
- Market Capitalization: $9.19 billion
StockStory’s Take
Oshkosh’s fourth quarter results drew a negative market response, with investors reacting to a mix of segment performances and ongoing cost pressures. Management attributed Q4 revenue momentum to strong demand in the Access and Vocational segments, specifically highlighting robust year-end orders ahead of 2026 price increases. CEO John Pfeifer noted, “We delivered adjusted operating margin of 8.4% on solid revenue, led by a strong finish in both Access and Vocational.” However, unfavorable product mix and higher manufacturing overheads weighed on operating income, with tariffs adding further pressure, especially in the Access business.
Looking into 2026, Oshkosh’s guidance is shaped by expectations for continued tariff costs, a cautious view on nonresidential construction, and targeted growth in Vocational and Transport segments. Management discussed plans to offset tariff impact through pricing and ongoing cost reductions, while anticipating lower Access sales due to soft private construction markets. CFO Matthew Field cautioned, “We expect the strong Q4 customer response to pricing actions at Access will adversely impact Q1 volumes,” and added that tariff-related costs are expected to be $200 million for the year, with recovery weighted toward the back half as cost-savings ramp up.
Key Insights from Management’s Remarks
Management linked Q4 performance primarily to strong Access and Vocational segment demand, strategic pricing actions, and product innovation, while cautioning on mixed end-market conditions and tariff headwinds.
- Access segment demand pull-forward: Year-end sales in the Access segment were driven by customers accelerating purchases ahead of 2026 tariff-related price increases, resulting in a book-to-bill ratio of 1.5 and a $1.3 billion backlog. However, management expects this pull-forward to dampen Q1 2026 volumes.
- Vocational segment throughput gains: The Vocational segment delivered nearly 13% annual growth, led by higher fire apparatus deliveries and ongoing investments to expand production capacity. CEO John Pfeifer noted substantial progress in reducing lead times and increasing throughput at key fire truck assembly plants.
- Tariff and cost management: Tariffs added approximately $25 million in Q4 alone, with a full-year impact of $200 million expected for 2026, mostly affecting Access. Management is pursuing tariff engineering, supply localization, and targeted price increases to offset these costs but acknowledged not all increases can be avoided.
- Product innovation showcased: Oshkosh highlighted new AI-powered safety and robotics technologies at CES, including a concept welding robot and the collision avoidance mitigation system (CAMS) for first responders. These initiatives are intended to underpin future growth, particularly in airport and delivery markets.
- Transport segment transformation: The Transport business is shifting toward higher delivery vehicle production, notably the Next Generation Delivery Vehicle (NGDV) for USPS, which surpassed 5,000 units produced and 10 million miles driven. Shipments are on schedule, and management foresees continued ramp-up and additional orders in 2026.
Drivers of Future Performance
Oshkosh’s 2026 outlook hinges on tariff mitigation, shifting segment mix, and cost discipline, set against a backdrop of uncertain construction markets.
- Tariff recovery and price actions: Management expects to fully offset $200 million in annual tariff costs by the end of 2026 through pricing, supply chain adjustments, and cumulative cost reductions. The impact will be heaviest in the first half, with improvements expected as the year progresses.
- Segment mix and market trends: Access revenue is projected to decline due to ongoing softness in nonresidential construction, especially private sector projects, while Vocational and Transport segments are expected to deliver growth. Management cited healthy airport and fire apparatus markets, with Transport benefiting from NGDV production and new defense contracts.
- Execution risks and timing: Management flagged that Q1 2026 will be seasonally weaker, reflecting the pull-forward of Access sales and full tariff exposure. Margin recovery and earnings improvement are anticipated to be back-half weighted, dependent on successful cost actions and stable demand in key end markets.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will be monitoring (1) the pace and effectiveness of tariff pass-through and cost reduction efforts, (2) stabilization or improvement in Access segment demand as construction markets evolve, and (3) continued execution on NGDV and new defense contracts within the Transport segment. Progress on commercializing new AI and robotics technologies will also be a key indicator of future growth potential.
Oshkosh currently trades at $143.32, down from $146.16 just before the earnings. Is the company at an inflection point that warrants a buy or sell? The answer lies in our full research report (it’s free).
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