Facing higher supply costs and lagging funding for the Joint Light Tactical Vehicle, Oshkosh is anticipating lower revenue in 2022 before seeing revenue increase in 2023 and 2024, company leaders said in a Jan. 26 earnings call.
The anticipated uptick, which analysts on the call also forecasted, would be driven by the company’s trailer programs, Cold Weather All-Terrain vehicle, Optionally Manned Fighting Vehicle and medium caliber weapons system, Oshkosh President and CEO John Pfeifer said. The programs would likely cause an increase in startup costs but would buoy Oshkosh’s defense sector, Pfeifer said.
“This is a growth business for us if you look out the next few years,” he said.
Company leaders in the call attributed this year’s shortfall to natural fluctuations in contract revenue and increased supply costs.
Oshkosh this year also faces a recompete for the JLTV contract. The company on Jan. 25 announced it was producing a hybrid version of the JLTV, which could contribute to its edge in winning the recompete, Pfeifer said, though he acknowledged that it remained to be seen how much the Defense Department will prioritize electrification.
Still, the added capability, in addition to other considerations like manufacturing capacity, quality, cost and efficiency, would all be considerations in the recompete, Pfeifer said.
“Everything that you do to enhance your capability on the program certainly helps,” he said.
In November, the company secured a $590 million order for more JLTVs.
Ultimately, the JLTV program is expected to deliver 50,000 units to the Army and 15,000 or 16,000 to the Marine Corps, Pfeifer said. So far, Oshkosh has delivered only a fraction of that, he said.
Late last year, the Army announced the follow-on contract for the JLTV could be cut by about half, and Oshkosh warned investors that the military was likely to cut back purchases of the JLTV.