Navistar Incurs 2Q Net Loss, Workhorse Idled
Navistar International Corp. posted a second-quarter net loss of $172 million, or $2.50 per share, compared to net income of $74 million, or $0.93 per share, a year ago. Adjusted net loss was $137 million, or $1.99 per share, versus net income of $102 million, or $1.30 per share, last year.
Sales and revenues for the quarter were $3.3 billion compared to $3.36 billion in the prior year. Results included unfavorable shifts in military product mix reflective of lower military budgets, industry-wide higher commodity and fuel costs, an asset impairment charge of $28 million relating to the company’s decision to idle its Workhorse Custom Chassis business, and a charge for $24 million for certain extended warranty costs.
“Certainly, our first half performance was unacceptable. It included a warranty reserve to repair early 2010 and 2011 vehicles,” said Daniel C. Ustian, chairman, president and CEO for Navistar, parent to Monaco RV LLC. “We were also affected by speculation surrounding our engine certification for our Class 8 engine, which is why we are working tirelessly with the U.S. EPA to get resolution.”
The company further announced a management realignment designed to give momentum to its strategy of “great products, competitive cost and profitable growth.” Troy Clarke, currently president of Navistar Asia Pacific, will assume responsibility for all Navistar’s operations in the newly-created role of president, Truck and Engine.
Jack Allen will become president of North America Truck and Parts, an expansion of his current role, and Engine Group President Eric Tech will expand his role to become president of Global Truck and Engine, responsible for all of our business operations outside of North America. The changes will take effect from July 1, following board approval.
Looking forward, for fiscal year ending Oct. 31, Navistar expects adjusted net income to be between break-even and $140 million, or $0 to $2.00 adjusted earnings per share. Analysts expect the company to earn $3.73 per share for the year.
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