Truck maker Navistar International Corp. (NAV) said Tuesday its profit for the first quarter plunged from last year, hurt by lower revenues and higher expenses. However, the company managed to post a profit amid tough economic conditions, due to improved commercial performance, higher market share and efforts to control costs over manufacturing expenses. Following the news, the company's shares lost nearly 8% in after-hours trading.
Net income attributable to Navistar was $17 million or $0.23 per share for the first quarter, compared to $234 million or $3.27 per share in the prior year quarter.
Excluding the impact of the company's settlement with Ford and other related costs, non-GAAP net income would have been $48 million or $0.67 per share in the first quarter of 2009.
On average, 12 analysts polled by Thomson Reuters expected the company to report earnings of $0.85 per share for the first quarter. Analysts' estimates typically exclude special items.
The Warrenville, Illinois-based company's first quarter sales and revenues declined 5% to $2.81 billion from $2.97 billion in the same quarter last year, hurt by lower military revenues. Twelve analysts had a consensus revenue estimate of $3.18 billion for the first quarter.
"First quarter results reflect the progress we are making in the toughest of economic conditions and in a normally difficult seasonal quarter for our company due to fewer operating days," said Daniel Ustian, Navistar's chairman, president and chief executive officer.
Sales from the truck segment declined 16.5% to $1.72 billion, sales from the parts decreased 13.5% to $467 million, and financial services generated sales of $75 million, down 19% from a year earlier.
However, engine sales for the first quarter surged by 61% to $821 million over a year ago, due to higher-than-expected demand in Brazil and Ford settlement.
Total costs and expenses for the quarter rose to $2.77 billion from $2.76 billion in the prior year quarter.
Earlier today, Navistar said GE Capital, a unit of General Electric Co.(GE), will become its preferred provider of retail financing solutions to support sales of Navistar trucks and school buses in the U.S.
The agreement takes effect immediately under the Navistar Capital name, with full implementation in 90 days.
The company said that 60 Navistar Financial Corp. employees who support NFC's retail business will join GE Capital to manage this program.
During the quarter, Navistar launched its first commercial trucks for the Indian market with joint venture partner Mahindra & Mahindra Ltd.
Navistar also concluded an agreement to buy certain assets and the membership interests of Continental Diesel Systems US LLC, to manufacture key fuel injection components for its MaxxForce diesel engines. The company also would establish a dedicated research and development facility to support Navistar's diesel power system components. The company is renamed Pure Power Technologies LLC.
Based in Columbia, South Carolina, Pure Power Technologies would operate a research and development center there as well as a manufacturing plant in nearby Blythewood, South Carolina.
For fiscal year 2010, Navistar continues to expect net income of $127 million to $163 million, or $1.75 to $2.25 per share. The Street currently expects earnings of $2.73 per share for the year.
The company now expects total truck industry retail sales volume for Class 6-8 trucks and school buses in the United States and Canada to be in the range of 195,000 to 215,000 units, compared to its prior estimate of 175,000 to 215,000 units.
Among others in the industry, Bellevue, Washington-based Paccar Inc. (PCAR) reported a steep decline in profit for the fourth quarter, dragged down by lower revenues reflecting challenging economic environment that has resulted in less freight year-on-year and lower demand for commercial vehicles.
Navistar closed Tuesday's regular trading session at $44.25, up 83 cents or 1.91% on a volume of 2.93 million shares. However, in the after-hours, the shares lost $3.50 or 7.91%. The stock has been moving in a range of $22.25 - $48.94 for the past 52 weeks, with an average daily volume of about 1.29 million shares for the past three months.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.