Investors are pulling air horns and cheering the results at Oshkosh Truck (NYSE:OSK) today, as the maker of everything from fire trucks to cement mixers to armored vehicles bucked the trend by reporting huge spikes in sales and profits. Hitting the highlights:

  • Gross margin for the first nine months of this year improved to 17.2%, and the operating margin leapt to 9.1%; only the net fell below trend, at 4%.
  • Profits leapt 68% to $1.21 per share, on the back of the added earnings accompanying last year's acquisition of JLG Industries.
  • Sales surged 79%.
  • Overall, cash generation was strong. Year-to-date, free cash flow came in at $258.2 million, up 146% from last year's $105.1 million and 41% better than reported net income under GAAP.

Finally, management raised profit guidance for this year to as high as $3.40 per share. It predicted that those profits would grow rapidly in 2008, to as much as $4.35 per share, on perhaps $7.2 billion in sales. If all comes to pass as planned, that would translate to a 26% rise in profits.

And yet...
Our rote recitation of earnings out of the way, there's something else I want to talk about here, concerning Oshkosh's role in the MRAP race. Foolish defense investors will recall that "MRAP" is a competition in which Oshkosh competes with rivals -- from tiny Force Protection (NASDAQ:FRPT), to military-industrial-complex stalwarts Textron (NYSE:TXT) and General Dynamics (NYSE:GD), to (now-British) Armor Holdings (NYSE:AH), and fellow truck maker Navistar -- to produce the next generation of super-robust armored vehicles.

According to management, Oshkosh "remain[s] optimistic about opportunities for Oshkosh Truck to produce Mine Resistant Ambush Protected ("MRAP") vehicles for our U.S. military. ... especially ... our opportunity to participate in the offering of the very capable Bull(TM) armored vehicle ... through our recently announced teaming agreement with Ceradyne (NASDAQ:CRDN)."

Now, this is just my opinion, but I consider Oshkosh's statement both disingenuous and misleading to investors who may be unaware of a serious problem with the company's participation in the MRAP program. Bloomberg reported last week that Oshkosh's contract to produce 100 "Alpha" armored vehicles for the Marine Corps (for a total of $30 million) is a dead end. According to Bloomberg, a letter from the USMC to Oshkosh says the Corps intends "not to order any additional items under this contract," citing "concern regarding overall vehicle survivability'' sufficient to "preclude safe vehicle operation."

I don't know about you, but language like that doesn't give this Fool a lot of optimism about Oshkosh's MRAP prospects.

I don't think management should lead its investors to think otherwise, without providing facts to back up its assertion.

There's a big difference between this Oshkosh and the one you were probably thinking of. Find out what it is in:

Fool contributor Rich Smith does not own shares of any company named above.