Navistar shares slump on first-quarter loss

By Siri Bulusu

Navistar International Corp. shares tumbled after the company, citing “softer industry conditions” and lower export sales, reported a substantial first-quarter loss.

The commercial and military truck manufacturer disclosed a net loss of $33 million, or 40 cents per diluted share, a narrower deficit than the year-ago quarter’s $42 million, or 52 cents per diluted share. The latest quarter’s results, while negative, were still a better performance than the 69 cents per diluted share loss that analysts had been expecting.

Net revenue during the first quarter was $1.77 billion, down 27 percent from $2.42 billion in the year ago quarter.

“Navistar’s decline in revenue was attributable to general market weakness in its core North American trucking market, along with market softness and currency headwinds in export markets,” said Brian Sponheimer, a Gabelli and Co. analyst in an email statement.

Navistar year-to-date share prices

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Navistar share prices slumped to $10.39 in afternoon trading following the first quarter earnings release. (Siri Bulusu/MEDILL)

In a press statement, the trucking company said that its inventory is higher than planned, but officials still expect the industry’s used trucks oversupply to continue in the near term.

“We operated within our indicated cash range in what is seasonally our weakest revenue and most cash-intensive quarter,” said Walter G. Borst, Navistar executive vice president and chief financial officer.

Navistar’s negative revenue from the truck segment was $51 million, expanding $33 million from $18 million in the year ago quarter.

“Sales declined $150 million (25% of the decline) on the non-recurrence of revenue Navistar had generated through its former Blue Diamond partnership with Ford, which ended last year,” Sponheimer said in an email.

“While our inventory is higher than we planned, I am confident in our abilities to address this issue and bring these inventories down over time,” Borst said.

Navistar revised its 2016 revenue guidance to $9.0 billion to $9.25 billion, a conservative estimate compared to Yahoo analyst consensus expectation of $9.44 billion.

In New York Stock Exchange trading Tuesday, Navistar shares prices fell $1.41, or 12 percent to close at $10.35.

Navistar shares dropped 12 percent following a first quarter earnings release Tuesday.(Siri Bulusu/MEDILL)