Navistar Reports 12th Straight Quarterly Loss
LISLE, IL — Navistar International Corp. on Wednesday reported its financial losses widened during its fiscal third to US$28 million, or a loss of US$0.34 cents per diluted share, marking the 12th straight quarter it has been in the red.
This compares to a net loss of US$2 million, or a loss of US$0.02 cents per diluted share, a year earlier for the truck and engine manufacturer.
This happened as revenue fell to US$2.5 billion from US$2.8 billion over the same time frame.
An increase in the company’s truck, bus and parts sales in the U.S. and Canada was more than offset by lower export truck and parts sales, revenue declines in its global operations and exit from the Blue Diamond Truck joint venture, according to Navistar.
Retail deliveries and chargeouts in the company’s core markets, Class 6-8 trucks and buses in the U.S. and Canada, were up 15 percent and 5 percent, respectively, year-over-year. Dealer-led sales increased 27 percent year-to-date through June.
“We are encouraged that overall, our core truck business continues to improve year-over-year, driven by steady and improving performance in medium, school bus and severe service, where we are on track to achieve our full-year market share goals,” said Troy A. Clarke, Navistar president and chief executive officer. “We’re not standing still and we continue to take actions to improve both the revenue and cost sides of the business”
For the third quarter 2015, the truck segment recorded a loss of US$36 million, compared with a year-ago third quarter loss of US$3 million. It recorded charges for adjustments to pre-existing warranties of US$3 million compared to a benefit for adjustments to pre-existing warranties of US$32 million in the third quarter of 2014.
Navistar’s parts business saw profit increase 10 percent in the third quarter to US$151 million while its global operations segment recorded a loss of US$26 million compared to US$21 million a year earlier. Its financial services business profit increased slightly to US$26 million from US$24 million in the fiscal 2014 third quarter.
Navistar also announced that it is pulling forward the next phase of its planned cost realignment and improvement actions in the areas of structural costs, materials costs and manufacturing costs.
“The cost efforts underway will enable us to become even more competitive in the marketplace,” Clarke said. “These actions will allow us to invest in key areas of the business, paving the way for Navistar to be profitable and cash flow positive in 2016 and better positioned as the truck market comes off its peak.”
Looking ahead to the fourth quarter, Navistar said it expects to achieve earnings before interest, taxes, depreciation and amortization (EBITDA) of between US$175 million to US$225 million, excluding pre-existing warranty and one-time items.
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