WARRENVILLE, Ill. — Navistar promised investors it will turn a profit this year, despite continuing economic troubles and sluggish truck sales.
The company posted its third quarter results this week – a net loss of US$12 million. However, over the first three fiscal quarters of 2009, Navistar has reported a $234 million profit and though it has downgraded its expectations for 2009, the company said it will remain profitable.
“While we are lowering our guidance, we still expect to be strongly profitable at $4.95 to $5.25 per share and I am encouraged by the results of the company and our commitment to generate positive results for our shareholders during these challenging economic times,” said Daniel C. Ustian, Navistar chairman, president and chief executive officer. “The third quarter is traditionally our most challenging quarter, but we remain focused on the long-term success of the company. Therefore, we elected not to implement drastic short-term cost cutting actions that would have impacted our ability to deliver long-term results.”
Navistar predicted total industry retail sales for Class 6-8 trucks and buses in the US and Canada for its fiscal year 2009 will total between 165,000 and 185,000 units. That compares to 454,700 units in 2006, which was attributable in part to the pre-buy in advance of EPA07 emissions standards. Navistar said it’s only expecting a “minimal” pre-buy this year.
In 2010, Navistar says the industry volumes will be between 175,000 and 215,000 units.
Navistar’s truck segment lost $28 million in the third quarter, however the company says it has increased market share across most classes during the quarter and the first nine months of 09. It claims its Class 8 heavy-duty market share has grown 10% in the third quarter compared to the same period of 2008.
The engine segment turned a $45 million profit in the third quarter, even though total engine unit volumes dropped by 15,700 units in the quarter versus 08.
The parts segment reported a Q3 profit of $93 million, an 82% increase thanks in part to strong demand from the US military.
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