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Oshkosh Corp

Oshkosh Corp

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-- Shares of Oshkosh Corp.

continued to surge in premarket trading Wednesday, a day after the specialty vehicle maker beat out three rival teams for an Army order of 2,244 bomb-resistant vehicles to outfit ground forces in Afghanistan.The Oshkosh, Wis., company pulled out the win over its larger rival Navistar, as well as BAE Systems and Force Dynamics, a joint venture between Force Protection Inc.

and General Dynamics Corp.Steve Barger of KeyBanc Capital Markets said the all-terrain vehicle contract is "clearly a positive for the stock and we anticipate significant upside in the name Wednesday."In Wednesday morning trading, Oshkosh shares soared $4.08, or 28 percent, to $18.62, while Navistar fell $1.48, or 3.4 percent, to $42.12 and Force Protection fell 7 cents to $7.78.

The pact was announced after the markets closed on Tuesday.Stephen Volkmann of Jefferies & Co.


said Oshkosh's win is a loss for Navistar and the company's focus should now be "back to the basics" in truck markets.

Volkmann said Navistar's low stock value and a potential recovery in truck markets put the company in a good position, and it "would use any pullback to build positions."If Oshkosh manufactures all the vehicles rather than subcontracts elements of the program at an operating margin of between 10 percent and 12 percent, the Pentagon contract could contribute 90 cents per share to $1.10 per share before the end of the company's fiscal 2010, Barger said.He did not revise his profit estimates for Oshkosh, as he awaits more details on vehicle delivery or if Oshkosh ultimately uses subcontractors.

He estimates the company will post a loss of 61 cents per share this year and will earn $1.24 for 2010.Analysts surveyed by Thomson Reuters expect Oshkosh to post a loss of 61 cents per share for 2009 and earn 90 cents per share next year.The program could ultimately grow to 5,000 vehicles or more, Barger said.

However, if this occurred, he is not certain if Oshkosh would be the prime contractor or if the Defense Department would instead turn to other Pentagon contractors.Copyright 2009 Associated Press.

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