Navistar International Corp. (NYSE: NAV) released fiscal third quarter financials on Thursday morning showing its losses grew in the third quarter of the year while revenue fell 18%, following news on Tuesday that Volkswagen is taking a minority interest in the Illinois-based company.

The truck and engine manufacturer reported a net loss of $34 million, or 42 cents per share, for the three months ending July 31, compared to a third quarter 2015 net loss of $28 million, or 34 cents per share, as it faced what it called “tougher market conditions, particularly in the heavy segment.”

Revenue fell to $2.1 billion from $2.5 billion a year earlier, which the company mainly attributed to lower year-over-year chargeouts in the company's core markets, Class 6-8 trucks and buses in the U.S. and Canada, which was affected by softer industry conditions, primarily in the Class 8 market. (Chargeouts are typically defined as trucks that have been invoiced to customers, with units held in dealer inventory.)

A consensus forecast by analysts was expecting a loss of 14 cents per share with revenue of $2.18 billion.

Despite the wider loss, Navistar said it achieved $32 million in structural cost reductions during the third quarter, raising year-to-date structural savings to $145 million. Combined with product and purchasing cost savings, the company's total year-to-date costs savings exceed $300 million.

Third quarter 2016 earnings before interest, taxes, depreciation and amortization (EBITDA) totaled $96 million versus $106 million in the same period one year ago. This more recent quarter included $36 million in adjustments, including $19 million of pre-existing warranty charges and $17 million in asset impairments and restructuring costs, compared to adjustments of $23 million in the third quarter of 2015.

Excluding these items, adjusted EBITDA was $132 million in the third quarter 2016 compared to $129 million in the same period one year ago.

"As we pursue our goal of market share growth, we do see some encouraging signs in the area of order share, where year-to-date share of new orders continues to be up for the past three quarters,” said Troy A. Clarke, Navistar president and CEO. “We are confident that as the industry works through its near term challenges, particularly in Class 8, our improvements in order share will translate to improved retail share as well."

Navistar Truck segment net sales declined 24% to $1.4 billion compared to third quarter 2015, due to lower core truck and export truck volumes, a shift in product mix in the company's core market and lower used truck revenue, according to the company. Chargeouts in the company's core markets were down 23% year over year.

Parts segment net sales declined $28 million or 4% but recorded a profit of $152 million, flat compared to third quarter 2015 while Global Operations net sales declined $24 million year over year to $85 million as recorded a loss of $5 million compared to a year-ago third quarter loss of $26 million. Financial Services net revenues decreased by $3 million to $60 million but recorded a profit of $26 million, equal to third quarter 2015.

Earlier this week, Navistar announced that it has formed a wide-ranging strategic alliance with Volkswagen Truck & Bus, which includes an equity investment in Navistar and framework agreements for strategic technology and supply collaboration and a procurement joint venture.

On the call, company executives said the "planned alliance" will result in collaboration on technology and the licensing and supply of Volkswagen Truck & Bus products and components. Clarke added that this will allow Navistar to "optimize product development costs. We'll gain significant economies of scale in the short term [from the alliance]... and position the company for considerable growth when the headwinds of inventory subside."

Pressed by an analyst to elaborate on reports that the alliance will result in VW supplying engines and other powertrain components to Navistar by 2019, Clarke demurred from going into details. "We are not prepared to discuss a product plan at this point," he responded. "But we ask that you stay tuned."

Noting that Cummins’ engine share in International vehicles currently stands above 80%, Clarke said in response to a question that, regardless of the VW deal, there are “no plans to displace Cummins engines between now and the 2019 date” that had been given for the arrival of VW components in International models.

Asked if the VW deal will impact Navistar's with General Motors, including a recent agreement to manufacture GM's Cutaway G Van commercial chassis starting early nexty year, Clarke stated that "We're doing two projects for HM and expect no changes" regarding those plans. 

Navistar also on Thursday maintained guidance for fiscal year 2016 that includes revenue of $8.2 billion - $8.6 billion and adjusted EBITDA of $550 million - $600 million.

Related: Navistar, Volkswagen Announce 'Wide Ranging Strategic Alliance'