Despite rocky economic conditions, Navistar International in the second quarter of 2009 turned out profits of $12 million.
This is equal to 16 cents per diluted share, on $2.8 billion in net sales and revenues.
"Continued reductions in our product costs, lower selling, general and administrative expenses and increased market share growth, along with the company's military business, will enable us to maintain pace toward a profitable fiscal 2009 despite three consecutive years of dwindling truck volumes," said Daniel Ustian, Navistar chairman, president and chief executive officer.
However, the company is not immune to the recession's effects on the trucking industry. For the same quarter last year, the company saw net income of $211 million, or $2.88 per diluted share, on $3.9 billion in net sales and revenues.
The company's sales projection for Class 6-8 trucks in the U.S. and Canada for the fiscal year ending Oct. 31, 2009, has been reduced to between 165,000 and 185,000 units, down from the previous forecast of 210,000 to 225,000 units.
The company attributes the reduction to weak industry sales in every part of Navistar's commercial business, the company said. The company incurred other costs related to the Ford settlement, lowering second quarter earnings by $31 million, or 44 cents per diluted share. Other unexpected costs included those related to research and development and warranties on products sold previously.
"Although the current growth of our traditional businesses is hamstrung by the global recession, we have nonetheless been able to advance numerous strategic and tactical initiatives that will be key contributors to our future success," Ustian said.
The company calculated a net income of $246 million for the first six months of the current fiscal year, up from $146 million in the first six months a year ago. The increase can be attributed to the settlement with Ford, which amounted to $155 million.
Navistar now expects net income for the fiscal year ending Oct. 31, 2009, to be between $200 million to $225 million, not taking into account the Ford settlement and related charges. Last quarter's projection was in the range of $370 million to $410 million.
Despite a weakening economy, Navistar managed to boost its traditional market share in the trucking segment as a result of sales of its International ProStar truck and U.S. military procurement. The market share of its Class 8 heavy-duty truck increased by an 8 percentage point growth and a 9 percentage point growth in the second quarter and six months, respectively. Profit for the second quarter was down to $56 million before tax, a drop of $153 million from the same quarter of last year.
Engine sales, however, were hurt in the second quarter as a result of decreased demand for heavy-duty diesel pickup trucks and because of the economic climate. The company reported a loss of $84 million before tax in the quarter, trailing the $51 million profit before tax in the year-ago period. The company experienced costs of warranty on products in previous periods and the impact of costs in the Ford settlement.
The parts segment saw a boost in sales with the impact of its military parts business, with second-quarter profit before tax of $115 million on sales totaling $577 million. For the same period last year, the company made $56 million in profit before tax on sales of $438 million.
Due to a stable portfolio and improved margin on financing, the financial services segment, primarily Navistar Financial Corporation, returned an $18 million profit before tax for the second quarter.
This is equal to 16 cents per diluted share, on $2.8 billion in net sales and revenues.
"Continued reductions in our product costs, lower selling, general and administrative expenses and increased market share growth, along with the company's military business, will enable us to maintain pace toward a profitable fiscal 2009 despite three consecutive years of dwindling truck volumes," said Daniel Ustian, Navistar chairman, president and chief executive officer.
However, the company is not immune to the recession's effects on the trucking industry. For the same quarter last year, the company saw net income of $211 million, or $2.88 per diluted share, on $3.9 billion in net sales and revenues.
The company's sales projection for Class 6-8 trucks in the U.S. and Canada for the fiscal year ending Oct. 31, 2009, has been reduced to between 165,000 and 185,000 units, down from the previous forecast of 210,000 to 225,000 units.
The company attributes the reduction to weak industry sales in every part of Navistar's commercial business, the company said. The company incurred other costs related to the Ford settlement, lowering second quarter earnings by $31 million, or 44 cents per diluted share. Other unexpected costs included those related to research and development and warranties on products sold previously.
"Although the current growth of our traditional businesses is hamstrung by the global recession, we have nonetheless been able to advance numerous strategic and tactical initiatives that will be key contributors to our future success," Ustian said.
The company calculated a net income of $246 million for the first six months of the current fiscal year, up from $146 million in the first six months a year ago. The increase can be attributed to the settlement with Ford, which amounted to $155 million.
Navistar now expects net income for the fiscal year ending Oct. 31, 2009, to be between $200 million to $225 million, not taking into account the Ford settlement and related charges. Last quarter's projection was in the range of $370 million to $410 million.
Despite a weakening economy, Navistar managed to boost its traditional market share in the trucking segment as a result of sales of its International ProStar truck and U.S. military procurement. The market share of its Class 8 heavy-duty truck increased by an 8 percentage point growth and a 9 percentage point growth in the second quarter and six months, respectively. Profit for the second quarter was down to $56 million before tax, a drop of $153 million from the same quarter of last year.
Engine sales, however, were hurt in the second quarter as a result of decreased demand for heavy-duty diesel pickup trucks and because of the economic climate. The company reported a loss of $84 million before tax in the quarter, trailing the $51 million profit before tax in the year-ago period. The company experienced costs of warranty on products in previous periods and the impact of costs in the Ford settlement.
The parts segment saw a boost in sales with the impact of its military parts business, with second-quarter profit before tax of $115 million on sales totaling $577 million. For the same period last year, the company made $56 million in profit before tax on sales of $438 million.
Due to a stable portfolio and improved margin on financing, the financial services segment, primarily Navistar Financial Corporation, returned an $18 million profit before tax for the second quarter.
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