Navistar Reports Fourth Quarter Loss, But Record Revenues for Year

Navistar revenues for 2008 were up 20 percent compared to last year, and thanks largely to military sales, reported a profit for 2008 compared with a loss in fiscal 2007 -- but posted a loss for the fourth quarter.

The record revenues and near-record earnings exclude asset impairment charges and for the fiscal year that ended Oct. 31, 2008. Revenues increased 20 percent to $14.7 billion from $12.3 billion a year ago, primarily driven by increases in sales to the U.S. military of $3.5 billion. Despite a continuing weak truck industry, Navistar reported a profit for 2008 compared with a loss in fiscal 2007.

"Our strategy of building great products, achieving a more competitive cost structure and finding profitable growth opportunities has enabled us to fundamentally change our profitability even in these turbulent economic times," said Daniel C. Ustian, Navistar chairman, president and chief executive officer.

According to Ustian, major factors in the company's 2008 performance were increased sales to the military, increased market share in the Class 8 segment, led by the International ProStar with industry-leading fuel efficiency, growth in South American engine sales and expansion into global markets.

Navistar reported a loss for the fourth quarter of $343 million, or $4.81 per diluted share, compared with a loss of $103 million, or $1.46 per diluted share in the fourth quarter a year ago. For the full fiscal year ended Oct. 31, 2008, the company had net income of $134 million, or $1.82 per diluted share, and manufacturing segment profit of $719 million, compared with a loss of $120 million, or $1.70 per diluted share for fiscal 2007, and manufacturing segment profit of $426 million in fiscal 2007.

Included in its 2008 fourth quarter and full year results are asset impairment charges of $358 million and other costs of $27 million and $37 million, for the quarter and full year respectively, related to its diesel engine business for Ford pickups.

Excluding the asset impairment charges and other costs related to the company's diesel engine business with Ford, net income for fiscal 2008 were $529 millionA, or $7.23B per diluted share, and manufacturing segment profit was $1.1 billion, which would reflect near record earnings for the company in a tough North American truck market.

At a time when the commercial truck industry is severely depressed in North America, Navistar is growing beyond the cyclicality of its traditional markets, and delivered strong revenues and earnings in fiscal 2008. Truck industry volume in 2008 at 244,100 units was nearly half the industry volume two years earlier and far weaker than many had predicted. In fiscal 2007, comparable industry volume totaled 319,000 units.

Throughout fiscal 2008, Navistar has taken significant actions to enhance its liquidity in the midst of the broad credit crisis.