Around this time last year, truck manufacturer Oshkosh
On Thursday, the company announced sales of $6.3 billion for fiscal 2007, nearly doubling the previous year's pre-merger totals. Net income rose more than 30% to $268 million, and earnings per share came in at $3.58, nicely besting the $3.40 that analysts were expecting.
Oshkosh noted in its release that operating margins eclipsed the 10% level in the third and fourth quarters, no doubt thanks to the merger. Margins in the JLG portion of the company exceeded 13% in the fourth quarter, helping to compensate for the weaker fire truck business and the money-losing commercial segment.
But there could be rocky times ahead. The merger nearly doubles the size of Oshkosh, so this is no mere bolt-on acquisition. Integration could be difficult. And the company has misfired recently in another cooperative venture to build next-generation armored vehicles for the military. So not all of its tie-ups have been successful.
More recently, Oshkosh teamed up with Ceradyne
This bid is part of a plan by the military to purchase more than 6,400 "mine-resistant, ambush-protected," or MRAP, vehicles of various types for use in Iraq. General Dynamics
Oshkosh has not yet landed a major contract, but military officials saw enough in its first attempt to encourage the company to try again. Hopefully, that means it's just a matter of time before Oshkosh breaks through with a contract.
Yet regardless of what happens with the MRAP project, Oshkosh has made a good pickup in the JLG merger. The deal makes Oshkosh bigger, giving it more clout with suppliers. And it gives Oshkosh a way to take advantage of the global boom in infrastructure. With 14 successful acquisitions since 1997, Oshkosh knows how to make marriages work. Fools might want to give this company a closer look.