Earnings Watch: Navistar Reports Quarterly Profit of $55 Million
Navistar International Corp. on June 5 announced it turned around its financial picture in the second quarter of the year, with net income of $55 million compared to a second quarter 2017 net loss of $80 million.

Navistar International Corp. on June 5 announced it turned around its financial picture during its fiscal second quarter of the year, with net income of $55 million, or 55 cents per share, compared to a second quarter 2017 net loss of $80 million, or 86 cents per share.
Revenues for the period ending April 30 increased 16% from a year ago to $2.4 billion, primarily due to higher volumes in the company's Class 6-8 trucks and buses in the U.S. and Canada, according Navistar.
Second quarter 2018 EBITDA (earnings before interest, taxes, depreciation and amortization) was $174 million compared to $47 million a year earlier. Second quarter adjusted EBITDA was $182 million, compared to adjusted EBITDA of $65 million a year earlier.
"We had a great second quarter, delivering stronger than expected results by taking advantage of the robust market conditions," said Troy A. Clarke, Navistar chairman, president and chief executive officer.
Navistar ended second quarter 2018 with $1.14 billion in consolidated cash, cash equivalents, and marketable securities. Manufacturing cash, cash equivalents and marketable securities were $1.1 billion at the end of the quarter.
"We are also pleased to report that on a trailing 12-month basis, we were manufacturing free cash flow positive by nearly $100 million," Clarke said.
Navistar’s said truck segment net sales increased 22% to $1.7 billion in second quarter 2018 compared to second quarter 2017, due to higher volumes in the company's core markets, higher export truck volumes, an increase in military sales, and a shift in model mix, partially offset by a decline in Mexico truck volumes.
The truck segment profit increased to $42 million in second quarter 2018, versus a second quarter 2017 loss of $56 million.
The company’s parts segment second quarter 2018 net sales were $601 million, down $9 million compared to second quarter 2017. This was driven by lower U.S. volumes and Blue Diamond Parts sales, partially offset by higher Mexico volumes and parts sales related to the Fleetrite brand, according to Navistar. The parts segment recorded a quarterly profit of $132 million in second quarter 2018, down 14% versus the same period one year ago, primarily due to lower U.S. margins, higher freight-related expenses, and intercompany access fees.
Navistar’s global operations segment second quarter 2018 net sales grew 39% to $97 million compared to second quarter 2017. This was primarily driven by higher engine volumes in the company's South America engine operations due to the improving Brazilian economy, according to the company. The global operations segment recorded a $1 million profit in second quarter 2018 compared to a $7 million loss in the same period one year ago.
The company’s financial services segment second quarter 2018 net revenues increased 13% to $63 million versus the same period one year ago, primarily driven by higher overall finance receivable balances in the U.S. and Mexico, according to Navistar. Financial Services segment recorded a profit of $19 million in second quarter 2018, an increase of $4 million versus second quarter 2017, primarily due to improved interest margins.
Based on what Navistar said are “stronger industry conditions,” the company raised its 2018 full-year guidance:
Industry retail deliveries of Class 6-8 trucks and buses in the United States and Canada are forecast to be 380,000 units to 410,000 units, with Class 8 retail deliveries of 250,000 to 280,000 units
Navistar revenues are expected to be between $9.75 billion and $10.25 billion
The company's adjusted EBITDA is expected to be between $725 million and $775 million
Year-end manufacturing cash is expected to be about $1.2 billion
"The work we've done in the first half of the year growing Class 8 share, building our backlog and managing costs, combined with strong industry conditions, positions us to deliver an even stronger second half," Clarke said.
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