LISLE, Ill. — Navistar this morning reported its first quarterly profit since initiating a turnaround plan more than three years ago.
The company reported Q2 net income of US$4 million on revenues of $2.2 billion. Revenues were down 18% on softening market conditions and the discontinuation of the company’s Blue Diamond Truck joint venture.
“For the first time since we launched our turnaround more than three years ago, Navistar reported a quarterly profit,” said Troy A. Clarke, Navistar president and chief executive officer. “Our performance this quarter begins to demonstrate the earnings potential of this company. The fact that we earned a profit despite lower Class 8 truck volumes that impacted the entire industry, underscores the tremendous progress we continue to make in managing our costs effectively and improving our operations.”
Navistar also reported strong demand for its new HX Series vocational truck, noting it has already received more than 70% of its projected orders for this fiscal year.
The company lowered its guidance for the second half of 2016, due to softening Class 8 market conditions.
“While we were net income positive in the second quarter, it will now be difficult for us to be profitable for the entire year given the tougher than anticipated market conditions, primarily due to the lower outlook for Class 8 industry volumes,” Clarke said. “We are confident we will generate and implement additional performance improvements to partially offset current industry conditions.”
Navistar reduced its industry projection for Classes 6-8 truck and bus retail deliveries in the US and Canada from 360,000 units to 330,000. It also reduced its Class 8 truck market projection from 250,000 units to 220,000.