WARRENVILLE, Ill. — In the weakest market conditions seen since 1962, Navistar has managed to turn a US$12 million second quarter profit.
Still, that’s a far cry from the US$211 million net income Navistar reported during the second quarter of 2008. This year’s Q2 results were impacted by weak industry sales in every part of Navistar’s commercial business, the company said.
“Although the current growth of our traditional businesses is hamstrung by the global recession, we have nonetheless been able to advance numerous strategic and tactical initiatives that will be key contributors to our future success,” said Daniel C. Ustian, Navistar chairman, president and chief executive officer.
For the first six months of fiscal 2009, Navistar has reported a profit of US$246 million.
“Continued reductions in our product costs, lower selling, general and administrative expenses and increased market share growth, along with the company’s military business, will enable us to maintain pace toward a profitable fiscal 2009 despite three consecutive years of dwindling truck volumes,” said Ustian.
Navistar is now projecting Canadian and US Class 6-8 truck sales (and school buses) to total between 165,000 and 185,000 units this year. Previous forecasts were as high as 210,000 to 225,000 units. The company said it is experiencing only a “minimal” pre-buy of EPA07 equipment in advance of the more stringent 2010 emissions standards.
“It is now clear that the economic recovery will take longer than had been originally expected. We are addressing this likelihood straight on by maintaining focus on our core product and market initiatives while taking the necessary steps that will allow us to adapt to the rapidly changing marketplace,” said Ustian.
Specifically, Navistar’s truck segment reported a second quarter profit of US$56 million compared to $209 million a year ago. Navistar says it has increased market share since last year thanks to the success of its International ProStar. The company claims it gained 8% market share in the second quarter compared to the second quarter of last year and 9% over the previous six months compared to the same six months last year.
The engine segment reported a loss of US$84 million compared to a profit of US$51 million over the same period a year ago.
Navistar’s parts segment reported a Q2 profit of US$115 million before tax, up from $56 million in the second quarter of 08.
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