Oshkosh misses earnings despite revenue beat, faces tariff headwinds
Access equipment margins plunge 30% as specialty vehicle maker forecasts $200M in tariff costs for 2026
Oshkosh Corporation reported mixed fourth-quarter results on Wednesday, with revenue beating Wall Street expectations while adjusted earnings per share missed estimates, as the specialty vehicle manufacturer grapples with margin pressure in its Access Equipment segment and looming tariff costs.
The Wisconsin-based company posted adjusted earnings per share of $2.26 for the fiscal fourth quarter, falling short of the $2.33 consensus estimate from analysts. Revenue reached $2.69 billion, exceeding projections of $2.62 billion and providing a bright spot in an otherwise challenging quarter.
Shares fell 2.8% in pre-market trading following the announcement, as investors digested the earnings miss and the company's guidance regarding substantial tariff-related costs ahead.
The earnings shortfall was driven primarily by significant margin compression in Oshkosh's Access Equipment segment, which includes aerial work platforms. The segment's operating income plunged 30.5% year-over-year to $99.3 million, reflecting adverse price-cost dynamics and an unfavorable product mix. Consolidated adjusted operating margin declined to 8.4% of sales, down from 9.4% in the same period last year.
Despite near-term challenges, management offered forward guidance that exceeded analyst expectations. Oshkosh initiated fiscal 2026 adjusted earnings per share guidance at approximately $11.50, above the consensus estimate of $10.86. The company expects strength in its Vocational and Transport segments to partially offset continued weakness in non-residential construction affecting the Access business.
A significant new headwind emerged in the form of tariff costs, with Oshkosh forecasting approximately $200 million in tariff expenses for 2026. This represents a dramatic increase from the $35 million in tariff costs incurred in 2025. The company plans to implement pricing increases and pursue cost reduction strategies, including supply chain negotiations and engineering changes, to mitigate these expenses.
"We anticipate that improved results in our Vocational and Transport segments will be partially offset by continued weakness in non-residential construction affecting the Access segment," the company stated in its earnings announcement. The Access segment's struggles reflect broader softening in the North American market for construction equipment.
Analysts have largely maintained a positive outlook on Oshkosh despite the earnings miss, with 17 analysts covering the stock collectively rating it a Moderate Buy. The average price target stands at $157.65, suggesting potential upside from current levels. However, near-term sentiment remains cautious as investors weigh the company's ability to navigate the challenging tariff environment while restoring Access segment margins.
Oshkosh's diversified business model—which includes defense, fire and emergency vehicles, and commercial equipment—has traditionally provided stability during cyclical downturns. The company's defense contracts, including recent awards totaling $142 million, offer some insulation from commercial market volatility.
Looking ahead, investors will focus on Oshkosh's execution on pricing actions to offset tariff costs and any signs of stabilization in the non-residential construction market that could support a recovery in Access Equipment demand. The company's ability to maintain its operating margins while implementing price increases will be critical to achieving its raised 2026 guidance.