Oshkosh Corporation recorded a sales drop of 6.5% in the second quarter, attributed to a decline in Defense segment sales and lower sales volume in the Fire & Emergency segment as a result of supply chain disruptions, offset in part by improved pricing.
Consolidated operating income in the second quarter of fiscal 2022 decreased 65.9% - primarily due to higher materials and logistics costs, lower sales volume, manufacturing inefficiencies associated with supply chain challenges and a tight labour market.
“While we are encouraged by strong demand for our products and our ability to price for inflation, our second quarter results did not meet our expectations due to three principal factors: first, supply chain disruptions reduced sales volume and caused labour inefficiencies; second, Defense recognised unfavourable cumulative catch-up adjustments related to inflationary pressures; and third, we recorded an unfavourable non-cash adjustment on an equity investment,” says John C. Pfeifer, Oshkosh Corporation president and chief executive officer.
"We continue to believe that supply chain and inflationary challenges will subside over time and we remain positive in our outlook over the next several years given our strong backlogs and key indicators within the markets we serve.”
Oshkosh’s Access Equipment division saw sales rise 5.7% in the quarter as a result of higher pricing in response to higher input costs, offset in part by lower sales volume in China and Europe. However, income fell by 38.6%.
In the Defense segment, sales dropped 24.1%, while operating income dropped further – by 96.5%.
The Fire & Emergency segment also experienced falling sales and income as Oshkosh struggled with parts shortages.
Similarly, the Commercial segment witnessed a 1% sales drop and a 49% income fall, largely due to higher materials and logistics costs, lower sales volume and manufacturing inefficiencies associated with parts shortages.