Navistar Reports Q3 Net Income of $137M

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Driven by continued advances in its core business, increased military sales and improvements in its cost structure, Navistar International Corp today (Sept. 8) reported profitable results for the third quarter ended July 31.

“We are encouraged by the results of the third quarter and expect to deliver full year results toward the upper end of our earnings guidance,” said Daniel C. Ustian, chiarman, president and CEO.” In addition, we are experiencing several successful product launches and are actively delivering 2010-compliant products to our customers.

“Third-quarter results showed a continuation of the company’s ability to be profitable in difficult economic conditions. Beyond strong military sales, we saw improved performance from our core businesses in truck, engine and particularly service parts.”

Even though the industry continues at a nearly 50-year low, net income attributable to Navistar International Corp. for the third quarter totaled $137 million, equal to $1.83 of diluted earnings per share. Revenues for the third quarter totaled $3.2 billion. Net loss for the third quarter a year ago was $12 million, equal to 16 cents of diluted net loss per share.

“All of our businesses continue to perform well,” said Ustian. “We are encouraged by the results of the third quarter and expect to deliver full year results toward the upper end of our earnings guidance. In addition, we are experiencing several successful product launches and are actively delivering 2010-compliant products to our customers.”

Navistar’s Truck segment, which includes Monaco RV LLC, realized a profit of $227 million, compared with a year-ago third quarter loss of $28 million. The increase was aided by substantial military sales as part of the company’s International MaxxPro Dash Mine Resistant Ambush Protected (MRAP) vehicle and the military commercial off-the-shelf truck programs, improved commercial performance and continued material and manufacturing cost improvements. Commercial units sold in the company’s traditional United States and Canada Class 6-8 truck and school bus business increased by 7% for the third quarter and 12% for the nine-month period, compared with the respective prior year periods.

In a subsequent conference call, Navistar officials commented briefly on Monaco’s new products for 2011.

While the company is reducing revenue guidance, primarily as a result of deferring military revenue to fiscal 2011, the company has found other measures to stay within previously anticipated earnings guidance. The company is reaffirming its guidance of $2.75 to $3.25 per diluted share on lower full-year revenue of $12 billion. The North American traditional industry demand is expected between 190,000 to 195,000 units for Navistar’s fiscal year ending Oct. 31, 2010, an increase of between 9% and 12% from fiscal 2009.

In an unrelated announcement, Ustian announced that the company will be moving to Lisle, Ill., at the former Alcatel-Lucent East campus on Warrenville Road, and credited Illinois Gov. Pat Quinn and Attorney General Lisa Madigan with clearing a path for the company to retain or create nearly 3,000 permanent jobs over the next several years along with more than 400 construction jobs.

The company will invest $110 million dollars in the 1.2 million-square-foot Lisle headquarters, which will include executive management, business operations and product development. Core features of the technology center once envisioned for the Lisle campus will move, possibly to the Melrose Park facility as part of a contemplated $80 million investment. Another approximately $15 million will be invested in a new parts facility, the location of which is still being finalized, but will be in the Northern Illinois area. Combined, Navistar will be investing $205 million in Illinois.