OSHKOSH CORP earnings calls

fire truck production flow problems

Q (Steve Volkmann · Jefferies): Is the issue in fire truck production the same skilled-worker/material shortage as before, or are you finding new production flow and scheduling problems?

A: Management said the issue is broader than labor or simple shortages. They are transforming to modern high-flow manufacturing, digitizing parts flow and controlling each unique part to drive stability. They expect a 10% increase in 2027 and 25%-30% improvement by 2028 as production stabilizes.

"It's really about how fire trucks are produced for the next decade and meeting strong demand for this product, getting fire trucks to firehouses faster and making Pierce a much, much stronger company." — John Pfeifer (CEO)

NGDV production ramp timing

Q (Mig Dobre · Baird): Why was transport revenue essentially flat sequentially and what is holding you back from reaching full-rate NGDV production?

A: Management said production rates rose and stabilized in Q3, but lumpiness and prior one-time items offset revenue. They expect continued improvement in Q4 toward a normative 16,000-20,000 units annualized and to reach the upper end by mid-next year. They also noted supplier bottlenecks at times and are adding buffers to improve consistency.

"We expect that to continue to improve in the fourth quarter, at which time we will see kind of that normative range of, call it the 16,000-20,000 units we have talked about." — John Pfeifer (CEO)

Access equipment margin recovery

Q (Jerry Revich · Wells Fargo): Can Access Equipment make up price-cost headwinds and recover margins in 2027, and how does this compare to past recoveries?

A: Management said they are encouraged by Access performance and expect to be price-cost neutral this year or a little better, and they see healthy incrementals around the 30% range for JLG. They expect stabilizing production will return performance toward prior levels and that Q4 should show a margin step-up relative to Q3 as production stabilizes.

vocational margins recovery timeline

Q (David Raso · Evercore): Given recent quarters of disruption, how credible is the implied vocational margin step-up in Q4 and how quickly can margins recover at higher revenue levels?

A: Management said last year vocational had nearly 16% full-year margin, but this quarter fell to 11.4% due to parts-flow disruption. They believe stabilizing production back to earlier levels will drive margin recovery; their vocational guide of 12.5% is still strong historically and they expect margins to return to the 16%-18% range by 2028 with the production actions underway.

"If you look back last year, last year we had a full year margin for vocational, almost 16%." — Matt Field (CFO)

2028 targets and NGDV award timing

Q (Jamie Cook · Truist): Should we still trust your 2028 targets given fire truck delays, and what is the timing/confidence on an additional NGDV award?

A: Management said the NGDV award is coming and it's a matter of timing, not if, which is why guidance assumed no award this year. They are not pushing out 2028 targets; the main requirement is achieving strong throughput in Pierce firetruck operations, while NGDV, Access, and defense contract dynamics also support the 2028 outlook.

"It is going to come. It is a question of when, not if." — John Pfeifer (CEO)

refuse backlog visibility and access demand

Q (Stefan Diaz · Morgan Stanley): How much visibility does your current refuse backlog provide for demand recovery, and is Access strength partly pull-forward from next year?

A: Management said refuse backlog is now at similar levels to last year and customer conversations are more positive, giving comfort that 2027 could be similar to or slightly better than 2026. On Access, they said demand is driven by large mega projects (data centers, power gen) serving national rental customers, while private non-res remains stable but not yet growing.

"Our conversations with our customers have been more positive in terms of how they're looking at 2027." — Matt Field (CFO)

NGDV margin level and NOx repricing

Q (Tami Zakaria · JPMorgan): At high end NGDV production, what operating margin should we expect, and will you reprice firetruck backlog for NOx engine rules or rely on escalators?

A: Management declined to give near-term margin specifics but said for 2028 they expect NGDV margins around the 10% range, consistent with historical government contracting of 7%-13%. On NOx, they do not expect any material impact on pricing because vehicles are scheduled with customers based on the engines installed and priced on a customer-by-customer basis.

"Traditionally, government contracting is 7%-13%, so it is in that healthy range, is our expectation over the next couple of years." — Matt Field (CFO)

confidence in 30% incremental margins

Q (Kyle Menges · Citi): What gives you confidence that Access can deliver ~30% incremental margins in this upcycle — easy comps, tariffs, incentive comp normalization, mix, or recent orders?

A: Management said the 30% figure is a broad historical expectation; with current demand, improved production efficiencies and throughput should drive better operating performance and incrementals. They also cited easier year-over-year comps from stable tariffs, material cost reductions, and normalization of one-time items like incentive comp, and said specifics will come with 2027 guidance.

"The 30% John cited, really, that's kind of a broad brush stroke as to what we would historically see from that business." — Matt Field (CFO)

backlog helps raw material planning and mix

Q (Tim Thein · Raymond James): Does the strong Access backlog let you lock in raw material buys and better match price-cost, and could a nationals-heavy mix cause less favorable mix next year?

A: Management said the larger order level gives production stability and lets them manage plants more consistently, which drives cost efficiencies and better scheduling of buys. They also said they have had pricing discussions with customers amid volatile input costs, feel well-covered for the $2.7 billion backlog, and will revisit pricing if volatility rises.

"It does give us production stability and an outlook that we can manage our plants in a more consistent and optimal way." — Matt Field (CFO)

defense contracts and independent rental CapEx

Q (Lauren Sullivan · UBS): How are new defense contracts (FMTV, FHTV) performing given inflation, and are independent rental companies cutting CapEx or is it flat?

A: Management said production under the new defense contracts is going well: heavy vehicles started earlier and mediums are ramping progressively, with full build under new contracts expected by 2028 and contract terms that include price adjustments to help with inflation. On independents, they said CapEx is more flattish and spotty by region, with no broad turn yet in private non-res outside mega projects.

"If you look at the total, that's kind of flattish." — John Pfeifer (CEO)