OSHKOSH, Wis. (AP) — Shares of Oshkosh Corp. tumbled Thursday after the heavy vehicle maker said that its net income and revenue both fell sharply in the second fiscal quarter.

THE SPARK: The company, based in Oshkosh, Wis., said its net income fell to $67.9 million, or 74 cents per share, from $292.6 million, or $3.22 per share, a year earlier. Revenue dropped 39 percent to $1.75 billion from $2.86 billion.

The company also reduced its full-year revenue outlook for its defense segment to a range of $4.1 billion to $4.2 billion, from earlier guidance of $4.4 billion to $4.5 billion.

THE BIG PICTURE: Oshkosh President and CEO Charles Szews said the company is transitioning from rapid production of all-terrain vehicles used by the military to the U.S. Army's medium tactical vehicles. He said the change will hurt the company's year-over-year comparisons for the rest of the fiscal year.

Another drag on Oshkosh's sales: Reduced spending by North American municipalities facing massive budget shortfalls. Oshkosh sells fire and garbage trucks. When times are tight, governments tend to postpone replacing se such equipment. Given the dire fiscal picture in most cities and states, sales of these products might be depressed for many quarters.

THE ANALYSIS: Szews noted that Oshkosh is the only provider of those medium tactical vehicles through 2015. He said he expects sales of the vehicles to rise sharply in the second half of fiscal 2011. He said cost-cutting in the second half of the year should help offset some of the company's challenges.

The results were mostly in line with analysts' expectations. Analysts surveyed by FactSet projected earnings of 73 cents per share on revenue of $1.75 billion.

But investors and analysts reacted to the lower revenue guidance, noting that Oshkosh faces the same reductions in defense spending that are expected to hit the entire military-contractor sector.

SHARE ACTION: Oshkosh shares skidded $3.22, or 9 percent, to $32.30 in afternoon trading Thursday.