Navistar International's stock price rose last week, despite projecting lower-than-expected 2009 earnings, as company officials provided an optimistic forecast on North American truck sales and offered reassuring news about the company's cash and credit situation.


The Wall Street Journal reported that Navistar shares rose 23 percent following its fourth quarter 2008 earnings conference call. The company projected fiscal 2009 earnings below analysts' expectations, but predicted higher North American truck sales for FY 2009 over the previous fiscal year.

The company believes the industry forecast for U.S. and Canadian retail sales volume for Class 6-8 trucks and school buses for the fiscal year ending October 31, 2009, should total between 244,000 to 256,000 units. Industry volumes totaled 244,100 units in fiscal 2008, among the lowest in more than 30 years.

According to the Journal, company officials also forecast a stronger rebound in 2010.

The company said that based on current market conditions, net income for its fiscal year ending October 31, 2009, should be in the range of $370 million or $5.10 per diluted share to $410 million or $5.60 per diluted share.

"Our growth in the commercial truck market outside the U.S. and Canada is due in part to our growing military business and expansion into new business opportunities and will factor into our ability to deliver profitability in 2009 despite a weak North American business climate," said Dan Ustian, Navistar chairman, president and chief executive officer.

The Wall Street Journal reported that company officials said the company has sufficient liquidity and borrowing capacity to execute its strategies, with no refinancing is necessary for the company until late 2009 or early 2010.

At the end of 2008, the company restructured its truck operations to maximize efficiencies and improve the cost structure of truck operations. It says there are several areas where it is poised for growth, including:

* Navistar Defense LLC, a part of Navistar's Truck segment, which continues to develop new offerings that are expected to provide military revenue of approximately $2 billion.

* Growth of its parts business; Navistar Parts this month will launch PartSmart, a new value line of parts

* Growing its share of the commercial bus market

* Expanding its global business; the company says it's on track to achieve its long-term goal of deriving half of truck revenues from outside the U.S. and Canada.