Oshkosh Corporation on May 8 reported relatively flat consolidated sales of $2.32 billion for the first quarter of 2026, as the company balanced strategic production ramps against significant weather−related disruptions and shifting market dynamics.
While net income saw a decrease to $43.1 million compared to $112.2 in Q1 the previous year, management has maintained its full-year adjusted earnings guidance, citing a heavily back-half weighted growth trajectory driven by the Vocational and Transportation segments.
Vocational segment: weathering the storm
The Vocational segment, a cornerstone of Oshkosh’s portfolio, reported a 4.8 percent decrease in sales to $825 million. Operating income for the segment fell 28.1 percent to $84.7 million, primarily due to lower sales volumes in refuse vehicles and unfavorable products mix.
Refuse vehicle volumes dropped approximately 25 percent in Q1, a trend expected to persist with a projected 25 to 30 percent decline for the full year due to cautious customer capital expenditure.
Despite these hurdles, the fire truck business remains a primary growth engine. While production throughput increased by 10 percent year-over-year, actual deliveries fell below expectations due to widespread weather and travel disruptions that prevented customers from performing final inspections.
CEO John Pfeifer emphasized that this is a timing issue rather than a demand problem, noting a robust backlog with a book-to-bill ratio near one.
“Importantly, demand across our segments remains solid and we have good visibility for the remainder of the year,” he said.
To meet this demand, Oshkosh is executing a $150 million investment plan to expand fire truck capacity, with the majority of improvements slated for completion by year-end
Consequently, management expects sequential increases in fire truck shipments throughout the remainder of 2026.
Transportation Segment: NGDV delivers
The Transportation segment emerged as a highlight for the quarter, with sales increasing 10.8 percent to $512.8 million. This growth was spearheaded by the ramp-up of the Next Generation Delivery Vehicle (NGDV) production for the United States Postal Service (USPS).
For the full year, Oshkosh expects an NGDV production run rate at the low end of 16,000 to 20,000 units, closely aligned with USPS delivery schedules.
Operating income in the Transport segment rose to $4.2 million, up from $0.6 million in the prior year, bolstered by higher volumes and fewer adverse cumulative catch-up adjustments.
Looking ahead, the segment is poised for a significant margin boost in the second half of the year as the new Family of Medium Tactical Vehicles (FMTV) contract begins, featuring materially higher pricing and improved margins.
Strategic outlook, operational efficiency
While the Access segment faced a challenging quarter with operating income down 66.3 percent, the underlying demand remains "solid," evidenced by a strong book-to-bill ratio of 1.6. Large-scale "megaprojects," such as data centers and power generation, continue to drive orders.
To mitigate macroeconomic pressures, Oshkosh is leveraging the Advanced Import Payments Adjustment (AIPA), recording a $13.5 million refund accrual in Q1 to offset Section 232 tariff impacts.
Management expects price/cost dynamics to remain neutral for the full year, with more significant benefits realized after Q2 as cost-reduction measures and new contract pricing take full effect.
With "a lot of that within our control," as Pfeifer noted in a conference call with analysts, Oshkosh remains confident in its ability to deliver on its ambitious 2028 strategic targets.
