Navistar’s 2Q Income Plunges
Navistar International Corp. said Tuesday its fiscal second-quarter income fell to $12 million, or 16 cents a share, from $211 million, or $2.88 a share, a year ago, due to what it said were historically challenging market conditions.
Net sales for the quarter ended April 30 fell almost 30% to $2.8 billion, from $3.9 billion a year ago, and the results “were impacted by weak industry sales in every part of Navistar’s commercial business,” the truck and engine maker said in a statement.
It cut its earnings outlook, stating that its profit for its fiscal year ending Oct. 31 will be $200 million to $225 million, or $2.80 to $3.10 per share, excluding charges related to its settlement with Ford Motor Co. Including the Ford settlement, earnings will be $5.20 to $5.50 per share.
Navistar said in March that its net income for the year would be $370 million to $410 million, or $5.10 to $5.60 per share, excluding the Ford settlement, and $7.55 to $8.05 per share including the settlement. (Click here for previous coverage.)
Its truck segment reported a $56 million second-quarter profit before taxes, down from $209 million last year, while its engine unit lost $84 million before taxes, compared with a $51 million profit before taxes in the same period a year ago.
Navistar cut its U.S. and Canada retail Class 6-8 truck and bus sales outlook for its fiscal year to 165,000 to 185,000 total units for the industry, down from a previous forecast of 210,000 to 225,000 units.
“It is now clear that the economic recovery will take longer than had been originally expected,” said Chairman and Chief Executive Officer Daniel Ustian. “We are addressing this likelihood 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.
“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,” he said in a statement.