Oshkosh Corp. expects third quarter losses

By Avrum D. Lank, Milwaukee Journal Sentinel

Oshkosh Corp. (OSK) expects to lose money in its third fiscal quarter because of a write down of the value of an investment in a European subsidiary and "weaker performance" than expected.

For the quarter, which ends Monday, the maker of specialty vehicles said it expected a loss of between $1.22 and $1.32 a share. Previously, it has expected to earn between $1.40 and $1.50 a share, and the 11 analysts surveyed by Bloomberg News had a mean estimate of $1.44. The company said it also expects lower earnings in the fourth quarter than last year, when it posted an $85.4 million profit.

The company said the third-quarter loss "relates to a non-cash charge for the impairment of goodwill to be recorded in connection with the company's European refuse collection vehicle manufacturer, the Geesink Norba Group." That loss is expected to be $175 million, or $2.32 a share.

"Lower than expected sales in both North America and Europe driven by softness in non-residential construction and general economic weakness, and rising raw material and fuel costs, have caused us to reduce our outlook for the third quarter and full fiscal year 2008," said Chairman and Chief Executive Officer Robert G. Bohn.

"During the quarter, we also lowered our outlook for Geesink due to a slower and more difficult than expected return to profitability, coupled with expectations of a weaker European economy and higher raw materials costs. This revised outlook has caused us to believe that the value of Geesink no longer supports the goodwill recorded for this business, resulting in the impairment charge we are announcing today."