Aftermarket

Navistar Improves Profitability in Fiscal Second Quarter

June 09, 2010

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Navistar International managed to improve its net income during the fiscal second quarter ending April 30, amid the launch of its MaxxForce advanced exhaust-gas recirculation engines
. Net income attributable to Navistar International was $30 million, or 42 cents a share, over the three months, up from $12 million, or 16 cents a share, during the year-ago period.

The company attributes the improvement to the performance of its core business. The company expects its earnings for fiscal year ending Oct. 31 to be in the range of $2.75 to $3.25 a share.

"Our expectations are to be profitable across the business cycle," said Daniel C. Ustian, Navistar chairman, president and CEO. "The plans we have put in place for our core businesses are on track through the second quarter. We are confident that the foundation is in place to continue to support our profitability and grow our business."

Navistar reported revenues of $2.7 billion in the fiscal second quarter, down from about $2.8 billion in the 2009 period.

"We remain confident for the remainder of the year about our ability to deliver fiscal 2010 results in the previously reported range," said Ustian. "The orders we have received for our 2010-compliant products ensure that the business is well positioned for the rest of the year."

Navistar's truck segment rolled in $76 million during the quarter, compared with $56 million in the 2009 quarter. According to Navistar, the increases were driven by improved commercial performance and continued material and manufacturing cost improvements offset partially by lower military sales.

Increased engine demand in Brazil offset the decreased volumes in North America caused by the expiration of the company's contract with Ford. The engine segment reported $15 million in profit in the 2010 period, compared to a loss of $84 million in the 2009 quarter.

The parts segment reported a second-quarter profit of $58 million, down from a year-ago profit of $115 million, which was positively impacted by strong MRAP volumes. Navistar said increased volumes in North America offset the impact of lower U.S. military sales.


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