Specialty truckmaker Oshkosh Corp reported a stronger-than-expected quarterly profit on Monday, lifted by an encouraging rebound in construction-related sales.
Like Terex Corp, which reported earnings last month, Oshkosh said its aerial access business, which makes equipment that moves workers and heavy material into hard-to-reach places on building sites, was rebounding.
It is a business that has suffered for several years running as a result of the downturn in many of the world's construction markets.
Adam Fleck, an analyst at Morningstar, said the rebound was driven by equipment leasing companies cautiously updating their aged fleets. The key rental houses are coming back, he said. It seems like they're feeling a little more confident after they practically abandoned the market last year.
Oshkosh posted a profit of $211.2 million, or $2.31 per share, for the third quarter ended on June 30, compared with a year-earlier loss of $26.6 million, or 36 cents a share.
Analysts on average had expected the Oshkosh, Wisconsin-based company to report a profit of $1.92 a share, according to Thomson Reuters I/B/E/S.
Revenue doubled to $2.44 billion as sales nearly tripled at the company's defense unit, which makes armored fighting vehicles for the Pentagon. Analysts had expected $2.30 billion.
Oshkosh cautioned, however, that its defense-related revenues would retreat next year because it has built and shipped most of the mine-resistant, ambush-protected, all-terrain vehicles that the U.S. government ordered.
The company said it hoped sales of non-defense vehicles, like fire trucks and ambulances and aerial access equipment, would offset that decline.
Whether that optimism is justified, is an open question. Access equipment sales, which were walloped by the downturn in residential and commercial real estate, rose 77 percent in the most recent quarter, lifted by especially strong sales in Latin America and North America.
But fire and emergency sales fell 15.6 percent during the quarter, reflecting the troubled state of budgets in many the municipalities that typically buy the equipment.
The latest quarterly results were lifted by a $15.3 million settlement of a tax audit.
Oshkosh shares were up 17 cents at $34.55 in morning trading on the New York Stock Exchange.
(Reporting by James B. Kelleher, editing by Gerald E. McCormick, Lisa Von Ahn, Dave Zimmerman)