Oshkosh Corporation reported fiscal 2018 third quarter net income of $153.4 million, or $2.05 per diluted share, compared to $128.6 million, or $1.69 per diluted share, in the third quarter of fiscal 2017. Results for the third quarter of fiscal 2018 included after-tax charges and inefficiencies of $5.2 million associated with restructuring actions in the access equipment segment, $7.7 million of debt extinguishment costs incurred in connection with the refinancing of the Company's senior notes and credit agreement as well as a $2.2 million tax benefit related to adjustments to provisional amounts recorded for tax reform in the United States. Results for the third quarter of fiscal 2017 included after-tax charges of $11.2 million associated with restructuring actions in the access equipment segment. Excluding these items, adjusted1 net income was $164.1 million, or $2.20 per diluted share, in the third quarter of fiscal 2018 compared to $139.8 million, or $1.84 per diluted share, in the third quarter of fiscal 2017. Comparisons in this news release are to the corresponding period of the prior year, unless otherwise noted.
Consolidated net sales in the third quarter of fiscal 2018 increased 6.8 percent compared to the third quarter of fiscal 2017 to $2.18 billion on strong demand for access equipment offset in part by expected lower defense segment sales.
Consolidated operating income increased 5.0 percent to $222.4 million, or 10.2 percent of sales, in the third quarter of fiscal 2018 compared to $211.9 million, or 10.4 percent of sales, in the third quarter of fiscal 2017. The increase in operating income in the third quarter of fiscal 2018 was primarily a result of the impact of higher consolidated sales volume and improved pricing, offset in part by adverse mix in the defense and access equipment segments and challenges associated with the ramp up of production in the access equipment segment. Excluding $6.9 million of pre-tax charges and inefficiencies related to restructuring actions in the access equipment segment, adjusted1 operating income in the third quarter of fiscal 2018 was $229.3 million, or 10.5 percent of sales. Excluding $10.6 million of pre-tax restructuring-related charges in the access equipment segment, adjusted1 operating income in the third quarter of fiscal 2017 was $222.5 million, or 10.9 percent of sales.
"We are pleased to report another quarter of solid performance, as our team members continued to execute our MOVE strategy," said Wilson R. Jones, president and chief executive officer of Oshkosh Corporation. "Despite the uncertainty surrounding the impact of trade policies, market fundamentals for our businesses are positive. Combined with a strong pipeline of defense business and higher backlog in all segments compared to the prior year, we are confident as we head into the last quarter of our fiscal year. The challenges we noted last quarter still exist and continued to impact us in the third quarter. But, the team is making progress addressing these challenges and we expect solid results to close out fiscal 2018.
"As a result of our performance and positive outlook, we are increasing our full-year fiscal 2018 earnings per share estimate range to $5.65 to $5.75 and our adjusted1 earnings per share estimate range to $6.00 to $6.10," said Jones.
Factors affecting third quarter results for the Company's business segments included:
Access Equipment - Access equipment segment net sales increased 18.4 percent to $1.16 billion in the third quarter of fiscal 2018. The increase in sales was due to improved demand for both telehandlers and aerial work platforms, led by North America.
Access equipment segment operating income increased 14.7 percent to $149.3 million, or 12.9 percent of sales, in the third quarter of fiscal 2018 compared to $130.2 million, or 13.3 percent of sales, in the third quarter of fiscal 2017. The increase in operating income was primarily due to the impact of higher sales volume and improved pricing, offset in part by challenges associated with the ramp up to higher production volumes, adverse customer and product mix, increased freight costs and the impact of unfavorable foreign exchange rates. Access equipment segment results for the third quarter of fiscal 2018 included pre-tax charges and inefficiencies associated with previously announced restructuring actions of $6.9 million. Access equipment segment results for the third quarter of fiscal 2017 included pre-tax charges associated with restructuring actions of $10.6 million. Excluding these charges and inefficiencies, adjusted1 operating income was $156.2 million, or 13.5 percent of sales, in the third quarter of fiscal 2018 compared to $140.8 million, or 14.4 percent of sales, in the third quarter of fiscal 2017.
