Navistar Still Expects To Be ‘Strongly Profitable’
Sep 10, 2009 10:27 AM
Confronted by hard economic conditions and the worst truck market since 1962, Navistar International Corporation (NYSE: NAV) today reiterated the company will be profitable for its fiscal year ending Oct. 31, despite reporting a loss for the third quarter ended July 31.
“While we are lowering our guidance, we still expect to be strongly profitable at $4.95 to $5.25 per share and I am encouraged by the results of the company and our commitment to generate positive results for our shareholders during these challenging economic times,” said Daniel C. Ustian, Navistar chairman, president and chief executive officer. “The third quarter is traditionally our most challenging quarter, but we remain focused on the long-term success of the company. Therefore, we elected not to implement drastic short-term cost cutting actions that would have impacted our ability to deliver long-term results.”
Manufacturing segment profit was $110 million and $604 million, including the impacts of the Ford settlement, net of related charges, for the third quarter and first nine months of 2009, respectively, compared with $473 million and $881 million in the year-ago periods. Due to changes in production schedules between foreign entities, improved results in foreign operations, and other special items, the company has revised its full-year tax estimates, resulting in a $30 million charge in the third quarter.
Navistar reported a net loss for the current third quarter of $12 million, equal to $0.16 per diluted share, including increased provisions for income taxes, on $2.51 billion in revenues, compared with net income of $331 million, equal to $4.47 per diluted share, on $3.95 billion in revenues in the third quarter a year ago. Included in the results is the impact of the asset acquisition of the recreational vehicle (RV) manufacturing business of Monaco Coach Corporation, which resulted in an extraordinary gain of $23 million, or $0.33 per diluted share, in the third quarter. The gain is a result of the company being able to acquire the RV inventories out of bankruptcy and the effects of purchase accounting with the fair value of the acquired assets.
For the nine months ended July 31, 2009, the company demonstrated solid progress in its business strategy by delivering net income of $234 million, equal to $3.27 per diluted share, on revenues of $8.28 billion, including the impact of the Ford settlement and related charges, compared with net income of $477 million, equal to $6.52 per diluted share, on revenues of $10.85 billion in the same period a year ago.
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