Oshkosh Corp. sales, income fall due to COVID-19

Posted on Jul 30, 2020 :: Insight on Business, Web Exclusive
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Posted by of Insight Publications

Oshkosh Corp. continues to feel the economic impact of the COVID-19 pandemic, announcing plans this morning to close a plant in Romania and consolidate production in its North American facilities to simplify whole goods manufacturing in its commercial segment.

The manufacturer announced the changes as part of its fiscal 2020 third quarter results. For the quarter, Oshkosh Corp. reported a net income of $80.2 million compared to $191.9 million during the same period last year. Consolidated sales during the quarter decreased 33.9 percent to $1.58 billion compared to the third quarter of fiscal 2019 largely due to a 61 percent decrease in sales in the access equipment segment. The company also reported consolidated operating income in the quarter decreased 54 percent to $118.6 million compared to $257.8 million in the same period last year.

Companies are spending less due to the COVID-19 pandemic and its corresponding economic uncertainty, said Oshkosh Corp. CEO Wilson R. Jones.

“I am very pleased with the response of Oshkosh leaders and team members as we have worked together to protect our people and deliver solid financial performance while balancing the needs of our customers, communities and business partners during these difficult times,” he said in a statement. “While we performed well in the current volatile environment, we must stay vigilant as we seek to navigate the challenging conditions in our markets. Early in the pandemic, we announced a series of temporary cost reduction actions to deal with the conditions we were facing. With the ongoing uncertainty in the economy, we have announced several permanent cost actions to further simplify our businesses and reduce costs.”

Those permanent changes include:

  • Closing an access equipment facility in Romania and moving production to factories in Pennsylvania, Mexico and China.
  • Relocating concrete mixer production from a plant in Dodge Center, Minn., and consolidating production to other North American facilities, including ones in Oshkosh, to simplify whole goods manufacturing in the company’s commercial segment.

“Once fully implemented, we expect these actions to generate $30 million to $35 million of annual pre-tax savings, with some benefits in fiscal 2021 and the full impact in fiscal 2022,” Jones said. “We remain confident in the long-term strengths of the company, especially our strong People First culture. We are focused on winning in our markets as we continue to invest in new products, new technologies and lifecycle services to position the company for future success.”

The company’s defense segment remained a bright spot with net sales for the quarter increasing 7.1 percent to $547.5 million due to the continued ramp up of Joint Light Tactical Vehicle (JLTV) program sales to the U.S. government and higher aftermarket parts and service sales. The segment’s operating income for the quarter increased 35.6 percent compared to the same time period last year to $40 million.

To read Oshkosh Corp.’s financial statement for the third quarter, click here.