Oshkosh Investors Disappointed By Outlook; Watch For Pressure In Other Construction Stocks

Oshkosh Corp OSK disappointed investors by providing downbeat outlook for the fiscal year 2017 though it offered upbeat forecast for the current fiscal year. This sparked investors to dump the stock in the pre-market trading on Friday.

The outlook provided by the company is likely to percolate into other companies belonging to the same construction segment. As a result, volatile trading can be expected in the construction stocks, including: Caterpillar Inc. CAT, Joy Global Inc. JOY and Cummins Inc. CMI.

Related Link: Deutsche Bank Is Cautious On U.S. Machinery Sector, Sees "No Recovery In Sight"

Ahead of meeting analysts, Oshkosh indicated that it expects adjusted EPS to be $2.85–$3.00 on revenue of $6.1–$6.2 billion for the fiscal year 2016, which ends in September. Analysts expect the company to report EPS of $2.78 on revenue of $6.1 billion.

For the fiscal year 2017, the company established a fresh EPS projection of $3.00–$3.40 on revenue of $6.5–$6.7 billion. Analysts are looking for an EPS of $3.56 on $6.66 billion in revenue.

The company's president and CEO, Wilson Jones, commented, "Longer-term, we expect strong free cash flow over the cycle to provide capital allocation alternatives that will benefit our shareholders. We expect to achieve our fiscal 2017 estimates through the continued execution and evolution of our MOVE strategy, which has delivered for customers and shareholders alike over the last several years."

At Time Of Writing ...

• Caterpillar was down 0.73 percent at $82.89.
• Cummins was down 1.04 percent at $120.68.
• Joy Global was down 0.22 percent at $27.67.
• Oshkosh was down 8.28 percent at $52.19.

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