NEW YORK, N.Y. — Navistar International Corporation said that it expects to double in size and become a solidly profitable $15 billion company by the end of the next industry business cycle which typically spans an 8 to 11 year period.
Daniel C. Ustian, president and chief executive officer and newly-named chairman-elect, said the goal of doubling in size is "bold and ambitious" and is tied to the company’s plan to "create a new reality."
Ustian was scheduled to speak to more than 150 security analysts and shareowners at 1:30 p.m. EST yesterday in the Crowne Plaza Hotel in midtown Manhattan. A replay of the web cast is available through the link http://www.shareholder.com and will be for approximately 30 days.
"Industry leading quality and disciplined cost management will be enablers for our growth and we expect to achieve our goal through product superiority and brand strength," Ustian said. "We plan to become a $15 billion company by increasing market share with existing products, through the introduction of new products in our current markets, as well as by finding new business opportunities in similar markets."
He cited two examples of the "new reality" — the expansion opportunity into the military market and the company’s competitive advantage with diesel engine expertise that will allow it to meet 2007 emission standards without the use of expensive catalytic converters.
Prior to the analyst meeting, International Truck and Engine Corporation, Navistar’s operating company, announced it no longer sees the need for complex diesel after-treatment for 2007 products and that International brand trucks will meet 2007 emission requirements without using costly NOx adsorbers.
"Our 2007 engine strategy ensures cost-effective compliance and secures our leadership," Ustian said. "By being able to eliminate the need for and expense of NOx adsorbers, we will meet 2007 environmental requirements while reducing complexity for our customers."
Navistar returned to profitability in the second half of fiscal 2003 after six quarters of losses. For its fiscal year ended October 31, 2003, Navistar recorded sales and revenues of $7.3 billion, up from $6.8 billion a year earlier and below the record $8.6 billion achieved in fiscal 1999.
Ustian reaffirmed that the company expects Canadian and U.S. total truck industry retail sales volume for Class 6-8 and school buses in fiscal 2004 to total 304,500 units, up 16 per cent from the 263,400 units sold in fiscal 2003. Looking further out, the company anticipates that industry retail sales volume will increase to approximately 400,000 units in its fiscal 2005 and to approximately 425,000 units in fiscal 2006.
"We expect to be profitable in 2004 and we reaffirm our 2004 target bonus goal of $2.02 per diluted common share based on forecasted industry volume of 304,500 units." Ustian said. "We demonstrated in the second half of 2003 that we can be profitable at low industry volumes and as demand increases, we expect our earnings will accelerate."
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