Heavy Duty Trucking Logo
MenuMENU
SearchSEARCH

Earnings Watch: Navistar Ends Fiscal Year with $97 Million Loss

Navistar reported losses for both its fiscal fourth quarter and full year. But it's optimistic about the future with its pending strategic alliance with Volkswagen Truck & Bus, which has received U.S. antitrust approval.

Evan Lockridge
Evan LockridgeFormer Business Contributing Editor
December 20, 2016
Earnings Watch: Navistar Ends Fiscal Year with $97 Million Loss

 

4 min to read


Truck and engine maker Navistar International Corp. (NYSE:NAV) on Tuesday reported losses for both its fiscal fourth quarter and full year. But it's optimistic about the future with its pending strategic alliance with Volkswagen Truck & Bus, which has received U.S. antitrust approval.

The Illinois manufacturer had a net loss of $34 million for the quarter ending on Oct. 31, or 42 cents per share, compared will a fourth quarter 2015 net loss of $50 million or 61 cents per share.

Ad Loading...

This was short of expectations. The average estimate of seven analysts surveyed by Zacks Investment Research had forecast net income of 24 cents per share.

Revenue in the most recent quarter fell 17% from a year earlier to $2.06 billion, also missing analysts’ expectations. The drop was largely driven by an 18% decline for charge-outs (typically trucks that have been invoiced to customers with units held in dealer inventory) in the company's Class 6-8 trucks and buses in the United States and Canada. Those charge-outs totaled 13,000 units, and largely reflected continued softening of Class 8 industry volumes in the U.S. and Canadian markets, according to the company.

Fourth quarter 2016 earnings before interest, taxes, depreciation and amortization (EBITDA) was $95 million versus $86 million in the same period a year ago. This year's fourth quarter included $9 million in net charges for asset impairments and restructurings, and $8 million in pre-existing warranty adjustments. As a result, adjusted fourth quarter 2016 EBITDA was $112 million.

Ad Loading...

For all of fiscal 2016, Navistar reported a net loss of $97 million, or $1.19 per share, versus a net loss of $184 million, or $2.25 per share, for fiscal year 2015. Revenue for fiscal 2016 was $8.1 billion compared to $10.1 billion in fiscal year 2015.

Fiscal year 2016 adjusted EBITDA was $508 million, versus $494 million adjusted EBITDA for 2015. Full-year adjusted EBITDA margins increased 140 basis points to 6.3%

Despite the losses, Troy Clarke, president and CEO, said the company was able to lower its break-even point and improve operations, in the fourth quarter and throughout the year.

"We recorded our fourth consecutive year of adjusted EBITDA improvement and significantly improved our adjusted EBITDA margin year on year, despite a substantial decline in revenues primarily due to the challenging conditions in the Class 8 market,” he said.

According to Clarke, Navistar had its third straight year of record profits in its parts business, totaling $640 million, while it “saw solid truck and bus order share performance, which positions us for higher retail market share in the future.”

Ad Loading...

Update on VW alliance

During the most recent fiscal quarter, Navistar announced plans for a wide-ranging strategic alliance with Volkswagen Truck & Bus, which includes an equity investment in Navistar, strategic technology and supply collaboration and a procurement joint venture.

In providing an update on its status, Navistar said that all appropriate regulatory filings have been made, and that it has already received antitrust approvals in the U.S. and Poland.

Meantime, other regulatory approvals are pending, and other agreements between the parties that constitute closing conditions remain on track, including final terms for the procurement joint venture and the companies' first powertrain collaboration, details of which will be announced soon after the closure of the alliance.

The company expects the transaction to close in the first quarter of calendar year 2017.

"Although we expect tough industry conditions to continue through the first half of 2017, we see further opportunities to continue to reduce our break-even point, including leveraging some early cost synergies from the Volkswagen Truck & Bus alliance," Clarke said. "The alliance announcement has been positively received by our customers, which when combined with our ongoing cadence of new product offerings, confirms our confidence in our improving standing in the market."

Ad Loading...

More earnings details

Navistar’s truck segment reported a loss of $189 million for fiscal 2016, compared with a fiscal year 2015 loss of $141 million.

Its global operations segment recorded a loss of $21 million compared to a year-ago fiscal year loss of $67 million.

Its financial services segment recorded a fiscal 2016 profit of $100 million, slightly higher than in fiscal year 2015.

More Equipment

Presentation slide showing ZF's North American market growth
Equipmentby Deborah LockridgeSeptember 10, 2026

ZF Expands Commercial Vehicle Push in North America

ZF is expanding its North American commercial-vehicle presence with new transmission applications, electrification, trailer technology and autonomous-driving systems.

Read More →
Tesla Semi electric truck with interior of Tesla Cybercab superimposed on top
Equipmentby Deborah LockridgeSeptember 8, 2026

Tesla Wants a Self-Driving Semi. Are Cameras Enough?

Could Tesla’s camera-only autonomous driving technology work on an 80,000-pound Semi? In this commentary, HDT's Deborah Lockridge takes a look at Tesla, Cybercab, and how autonomous trucks see the road.

Read More →
Red highway tractor pulling white trailer with red logo identifying Kodiak.
Equipmentby News/Media ReleaseSeptember 8, 2026

Kodiak: Driverless Long-Haul Truck Launch on Track for 2026

Kodiak AI says its driverless long-haul safety case is 93% complete and it remains on track to begin commercial operations by year-end 2026.

Read More →
Ad Loading...
Collage of five autonomous trucks
Safety & Complianceby Deborah LockridgeSeptember 8, 2026

What DOT’s Automated Vehicle Strategy Means for Trucking

The U.S. Department of Transportation issued a new automated-vehicle strategy that outlines plans for driverless-truck regulations, cross-state freight corridors, and federal safety standards.

Read More →
Port of Newark EV truck charging station.
Equipmentby News/Media ReleaseSeptember 8, 2026

East Coast Port Launches $45M Electric Truck Push

The Port Authority of New York and New Jersey announced millions in incentives for zero-emission drayage trucks, yard tractors, and new charging hubs near the port.

Read More →
PlusAI autonomous truck with trailer going down a highway
Equipmentby StaffSeptember 3, 2026

PlusAI Going Public to Fund Autonomous Truck Launch

A SPAC deal could provide PlusAI with up to $300 million as it works toward a 2027 commercial launch of factory-built autonomous trucks.

Read More →
Ad Loading...
Faded sketch of diesel engines on a factory floor with NHTSA logo superimposed on top
Equipmentby Deborah LockridgeAugust 31, 2026

NHTSA Moves to Rewrite Truck Fuel-Economy Rules

The National Highway Traffic Safety Administration says it lacks authority to regulate medium- and heavy-duty truck engines separately from complete vehicles, but the existing standards have not yet been eliminated.

Read More →
Illustration of Freightliner Cascadia on highway with engine cutaway
Equipmentby Deborah LockridgeAugust 27, 2026

Detroit Opens Orders for EPA 2027 Engines

Detroit isn’t starting from scratch to meet EPA 2027 diesel emissions standards. Its Gen 6 DD13 and DD15 engines keep much of today’s platform while updating the fuel and aftertreatment systems.

Read More →
Carrier Transicold electric transport refrigeration unit on stationary trailer with loading docks in the background
Equipmentby News/Media ReleaseAugust 25, 2026

Carrier Transicold Adds All-Electric TRU for Stationary Cold Storage

Carrier Transicold’s new Vector 8200 all-electric transport refrigeration unit gives fleets a diesel-free option for temporary refrigerated and frozen trailer storage.

Read More →
Ad Loading...
YouTube thumbnail showing Kenworth T880e electric truck and KW marketing director Kyle Kimball.
Equipmentby Deborah LockridgeAugust 25, 2026

A Closer Look at Kenworth’s Electric T880E Vocational Truck [Video]

Learn more about Kenworth's T880E battery-electric vocational truck at the Paccar Technical Center, including its range, applications, upfitting considerations, and PTO options, in this HDT Spotlight video.

Read More →