Seeking Alpha: Oshkosh Has The Margins; Can It Grow Revenue Enough?

It has been an interesting run for specialty vehicle manufacturer Oshkosh (OSK) over the last three or four years. The company was able to leverage its long expertise in tactical vehicles for the defense market into strong revenue and cash flow during the wars in Iraq and Afghanistan, but the sharp declines in defense demand, coupled with a weak market for construction-related and municipal vehicles, cut the shares down almost two-thirds between mid-2010 and the fall of 2011.

Oshkosh's struggles attracted the attention of Carl Icahn, but management successfully fended off his efforts by convincing shareholders that the company's MOVE strategy was the better plan for the company. I'd argue that the company's running tally of strong quarterly beats is a good argument that the MOVE strategy is a good one, and the market has rewarded the shares to the tune of a 70% gain over the past year. Looking ahead, though, the story is now evolving into one that less about margins and more about whether the company can log enough revenue growth in its non-defense businesses to keep the numbers moving forward.

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Oshkosh Has The Margins; Can It Grow Revenue Enough?