Oshkosh reports an expected defense vehicle sales drop in Q2

Oshkosh Corp. saw a predictable drop in defense vehicle sales in the second quarter of 2025 with its "winding down" of Joint Light Tactical Vehicles domestically following its 2023 defeat against AM General for a follow-on contract with the Army, company officials announced during an earnings call today.

Oshkosh, which newly rebranded its defense unit as the “transport” segment to account for its Next Generation Delivery Vehicle contract with the United States Postal Service, saw a $92.8 million drop in sales to $479.1 million for the quarter, a 16.2% dip compared to a year ago.

Despite decreased sales, operating income for the segment rose by nearly 50% to $17.8 million with a margin of 3.7%, an uptick that Mathew Field, vice president and chief financial officer of the company, attributed to better Family of Heavy Tactical Vehicles pricing, calling it the “largest contributor.”

The “improved FHTV pricing” matches similar pricing expectations following the company’s recent Family of Medium Tactical Vehicles three-year contract extension for variants of the low velocity air drop (LVAD) version of the FMTV A2, “which have been favorably received by the DOD,” John Pfeifer, president and CEO of Oshkosh, said during the call.

“This contract includes updated pricing and economic price adjustment mechanism, which we believe will yield favorable returns as we build units under the contract,” Pfeifer said.

Oshkosh expects to start building on the new FMTV contract sometime in the middle of 2026, Field said.

That follows the five-year extension that Oshkosh won last year for more FHTVs, which the company at the time predicted would kick off deliveries this month; both contracts have “similar terms of performance,” according to Field.

Field also said a rise in tactical wheeled vehicle sales overseas and a production ramp up of the NGDV slightly offset the sales decline for the quarter, as the company reported that it is steadily progressing on its plan to boost production of the new postal vehicle at its Spartanburg, SC, facility.

Looking forward at a “dynamic” tariff environment, Field predicted a “more limited impact from tariffs” as compared to the previous quarter as a result of cost actions Oshkosh has put in place for the year.

“We project the impact of tariffs to be fully offset,” Field said, with adjusted earnings per share expected around $11 for the year and total net sales of $10.6 billion, matching the company’s pre-tariff guidance.

Total second quarter sales for Oshkosh were $2.73 billion, a decline of $114.8 million because of lower sales volumes in the transport and access segments; adjusted earnings per share went up to $3.41, up 2.1% from the prior year.

“Despite the dynamic tariff environment, we're well positioned to take the necessary actions to deliver strong performance,” Pfeifer said.