Navistar posts loss but beats estimate, remains optimistic

By Richard Foster-Shelton
Medill Reports

Navistar International Corp. (NYSE:NAV) based in Lisle, Ill., reported an exacerbated net loss but beat analysts’ expectations, for its first quarter ended Jan. 31.

The company reported a net loss of $73 million, or 74 cents per diluted share, compared with a loss of $62 million, or 76 cents per share, on fewer shares outstanding, in the year-earlier quarter.

The first quarter net income included $46 million of charges resulting from the company’s debt refinancing in November 2017. Excluding the debt refinancing, the indicated net loss for the quarter was $27 million, or 27 cents per diluted share. Analysts estimated a loss of 29 cents per share.

The truck and bus manufacturer generated revenues of $1.9 billion, a 15 percent increase from the $1.7 billion in the same quarter the previous year. Driven by a 24 percent increase in the company’s core business, Class 6-8 trucks and buses, revenue figures were in line with analyst estimates.

Navistar stock closed at $38.17, up $1.13.

CEO Troy Clark expressed satisfaction with the quarter. “We delivered stronger than expected first quarter results,” Clark said in a conference call. “We are off to a strong start in 2018 thanks to our ability to grow Navistar’s position in a strengthening market. We grew our Class 8 market share and improved our margins.”

Looking to the future, Chief Financial Officer Walter Borst explained that industry changes during the quarter require recalibration of full-year estimates. Borst stated, “As a result of the higher industry volumes, we’re also raising our revenue expectations by $250 million to a range of $9.25 billion to S9.75 billion for the year.”

Bloomberg analyst Christopher Ciolino agreed: “A strengthening truck market and new product introductions that are fueling market share gains are likely to drive high single-digit revenue growth at Navistar in 2018.”

Photo at top: Navistar supplies military and law enforcement with vehicles such as this SWAT truck. (Creative Commons)