Oshkosh Corporation delivered solid results for the fourth quarter and full year 2025, achieving full-year sales of $10.4 billion and adjusted EPS of $10.79, which slightly exceeded guidance. Q4 sales increased 3.5% year-over-year to $2.7 billion, driven by improved pricing in the Vocational segment and higher volume in Access, though adjusted operating margin dipped 100 basis points to 8.4% due to tariffs and mix. The Vocational segment was a standout performer, growing revenue 13% for the year with a robust 15.8% margin, while the Access segment faced headwinds from approximately $25 million in tariffs during the quarter. Looking ahead to 2026, management provided guidance for adjusted EPS of approximately $11.50 on sales of $11 billion, reflecting a 'balanced approach' to a market expected to see softer nonresidential construction and a significant $200 million tariff headwind. Despite near-term volatility, including a projected Q1 EPS decline of about 50% year-over-year, the company remains confident in its long-term targets, reaffirming its goal to reach $18-$22 EPS by 2028 driven by the NGDV ramp-up, technology investments, and share repurchases.
| Metric | Value | Change |
|---|---|---|
| Q4 Revenue | $2.7 Billion | +3.5% |
| FY 2025 Revenue | $10.4 Billion | In line with guidance |
| Q4 Adjusted EPS | $2.26 | In line with guidance |
| FY 2025 Adjusted EPS | $10.79 | Slightly above midpoint |
| Q4 Adjusted Operating Margin | 8.4% | -100 bps |
| Vocational Segment FY Margin | 15.8% | Robust |
| 2026 EPS Guidance | ~$11.50 | Growth from 2025 |
| 2026 Sales Guidance | ~$11 Billion | Mid-single digit growth |
| Vocational Backlog | $6.6 Billion | High visibility |
| Tariff Impact (2026 Est) | $200 Million | +$160M vs 2025 |
Oshkosh is aggressively positioning itself as a technology innovator, moving beyond traditional equipment manufacturing to autonomous solutions. At CES, they showcased robotics, AI, and electrification, including a welding robot concept and autonomous airport platforms. This shift from 'enabling jobs at height to offering equipment that executes jobs autonomously' signals a strategic pivot to higher-value, tech-enabled service models that could drive future margin expansion and differentiation.
The Transport segment is undergoing a significant transformation driven by the Next Generation Delivery Vehicle (NGDV) program. Management reported surpassing 5,000 units produced and 10 million miles driven, with the fleet operating in nearly all 50 states. The successful ramp-up of this program, which is expected to account for roughly half of the segment's $2.5 billion in 2026 sales, validates the company's ability to execute on complex, large-scale government contracts and serves as a critical growth engine.
Management is actively navigating a challenging tariff environment through a combination of price increases and strategic cost mitigation. They announced price increases for Access products which successfully pulled forward demand in Q4, resulting in a book-to-bill ratio of 1.5. This demonstrates pricing power and the ability to protect margins, even as they face a projected $200 million tariff headwind in 2026.
The Vocational segment remains a bedrock of stability and growth, boasting a backlog of over $6.6 billion. Strength in Fire Apparatus (sales up 17%) and Airport Products (sales up 13%) is underpinned by secular trends in infrastructure spending and airport modernization. The company is investing $150 million in capital to increase throughput, indicating a strategic commitment to capturing this robust demand and expanding margins further.
The Access segment faces a challenging demand environment in 2026, with management guiding sales down to approximately $4.2 billion. This outlook contrasts with more optimistic views from some peers and reflects specific exposure to soft private nonresidential construction and manufacturing sectors. The guidance implies a 'weaker market condition' that could persist if economic indicators do not improve as anticipated in the second half.
Tariffs remain a significant financial drag, estimated at $200 million for 2026, which is $160 million higher than in 2025. While management plans to offset these costs through price increases and engineering, the magnitude of the headwind creates execution risk. There is also uncertainty regarding the sustainability of these rates if trade policies change, though management assumes current rates will hold.
The first quarter of 2026 is expected to be significantly weaker, with management projecting adjusted EPS to be 'about half of last year.' This decline is attributed to the pull-forward of Access sales in Q4 2025 and adverse price-cost dynamics early in the year. Such a sharp drop in quarterly profitability could unsetle investors and signals a slow start to the fiscal year.
Transport segment margins are under pressure despite revenue growth, guided at only 4% for 2026. This compression is driven by NGDV ramp-up costs, lower defense volume, and the wind-down of legacy contracts. While margins are expected to improve in the back half, the low starting point highlights the complexity of scaling this segment profitably.
Overall: Management maintained a confident yet pragmatic demeanor throughout the call, acknowledging near-term macro headwinds and tariff impacts while emphasizing the strength of their backlog and long-term strategic execution. They were transparent about the timing of margin recovery and the specific challenges in the Access segment, but shifted to a more assertive tone when discussing the Vocational segment's performance and the 2028 financial goals.
Confidence: HIGH - Management provided specific quantitative guidance and detailed operational milestones (e.g., NGDV production numbers, backlog figures) to support their outlook. They explicitly reaffirmed long-term targets despite short-term dips, indicating strong conviction in their fundamental business strategy and cost mitigation capabilities.
Approximately $11.50
Approximately $11 Billion
A little over $1 Billion
About half of last year
$550 to $650 Million
Approximately $4.2 Billion
Approximately $4.2 Billion
Approximately $2.5 Billion
Hedging & Uncertainty: Management frequently used temporal and probabilistic hedges to frame their outlook, particularly regarding the macro environment. Phrases like 'we believe,' 'we expect,' and 'roughly' were common when discussing 2026 guidance. They used the term 'balanced approach' to describe their market stance, acknowledging the dichotomy between strong mega-projects/data centers and weak private nonresidential construction. This hedging suggests they are managing expectations carefully, signaling that while they have a plan, they are not immune to broader economic cycles. They also softened the Q1 outlook by stating it 'could be about half,' providing a buffer rather than a hard commitment.
We believe our guidance for 2026 continues to support our plans to achieve our adjusted EPS range of 18 to $22 per share by 2028. - John Pfeifer, President and CEO
We are estimating adjusted operating income to be a little over $1 billion and we estimate that adjusted earnings per share will improve to approximately $11.50. - Matthew Field, Executive VP and CFO
We see a general continuation of recent economic conditions which includes expected lower capital investments at certain of our industrial customers. - John Pfeifer, President and CEO
We anticipate that the first quarter will be the lowest quarter of the year as we would traditionally see from seasonal factors. - Matthew Field, Executive VP and CFO
We believe that the announced 2026 tariff-related price increases for access products contributed to stronger sales performance in the fourth quarter. - Matthew Field, Executive VP and CFO
Analyst Sentiment: Analysts were highly focused on the disconnect between Oshkosh's cautious guidance for the Access segment and the more optimistic outlooks from peers like United Rentals. They pressed for clarification on market demand, the sustainability of pricing, and the specific mechanics behind the margin pressure in the Transport segment.
Management Responses: Management defended their Access guidance by detailing their specific exposure to soft private nonresidential construction, distinguishing it from peers focused on mega-projects. They were transparent about the mechanics of the Transport margin ramp, explaining the timing of contract pricing and volume growth. They maintained a consistent narrative regarding the 'pull-forward' effect of price increases on Q4 demand.
Analysts questioned the conservative Access guidance relative to peer reports of strong utilization and rental demand. Management clarified that their exposure includes soft manufacturing and private nonres construction, justifying a 'balanced' outlook.
Discussion on Transport margins focused on the bridge from 4% in 2026 to double-digit targets by 2028. Management emphasized that the building blocks (pricing, volume) are in place but timing of contract ramps affects the near-term profile.
Significant attention was paid to the impact of tariffs ($200M in 2026) and the company's ability to pass costs through to customers. Management confirmed they expect to be 'whole' on price-cost by year-end.
Inquiries into the NGDV program confirmed production is on schedule, with revenue recognition ramping in the back half of the year.
Oshkosh Corporation is successfully executing a multi-year transformation, leveraging strong demand in Vocational segments and the ramp-up of the NGDV program to offset cyclical weakness in Access equipment. The company's 2025 results showed resilience and margin control despite significant tariff headwinds. However, the 2026 guidance for modest EPS growth to $11.50, coupled with a projected 50% drop in Q1 earnings, suggests a near-term pause in momentum. The heavy reliance on price increases to offset $200 million in tariffs introduces execution risk, particularly if private nonresidential construction demand remains softer than anticipated. While the long-term target of $18-$22 EPS by 2028 is compelling and supported by a robust $6.6B backlog, the current valuation appears to fairly reflect this growth trajectory given the near-term demand and margin headwinds. Investors should wait for clearer signs of a recovery in the Access segment or faster-than-expected margin expansion in Transport before adding to positions.
Management indicated that private nonresidential construction and manufacturing construction remain under pressure, which is impacting demand for Access equipment. This creates a headwind for the first half of 2026.
Tariffs are a major cost headwind, estimated at $200 million for 2026. Management is assuming current rates remain in place and is implementing price increases and cost engineering to mitigate the impact.
There is notable strength in 'mega projects,' data centers, and power generation. This is driving demand for specific customers, though it is not yet enough to offset weakness in other construction sectors.
Strength in both air passenger and cargo traffic is driving growth in the Airport Products business, supporting long-term infrastructure investment and demand for Oshkosh's ground support equipment.