Navistar International Corp. (NAV) said Wednesday after the markets closed that it swung to a third quarter loss, hurt by continuing weakness in truck market and higher provision for income tax expenses. At the same time, the company lowered its full year earnings guidance.
The world's fourth largest truck maker reported a net loss for the third quarter of $12 million or $0.16 per share, compared to net income of $331 million or $4.47 per share for the year-ago quarter.
The latest quarter results include the impact of the asset acquisition of the recreational vehicle manufacturing business of Monaco Coach Corp., which resulted in an extraordinary gain of $23 million or $0.33 per share in the third quarter.
On average, 9 analysts polled by Thomson Reuters expected the company to earn $0.70 per share for the third quarter. Analysts' estimates typically exclude special items.
Warrenville, Illinois-based Navistar said net sales and revenues for the third quarter fell 36.5% to $2.51 billion from $3.95 billion in the same quarter last year. Eight analysts had a consensus revenue estimate of $2.67 billion for the third quarter.
Daniel Ustian, Navistar chairman, president and chief executive officer, said, "The third quarter is traditionally our most challenging quarter, but we remain focused on the long-term success of the company. Therefore, we elected not to implement drastic short-term cost cutting actions that would have impacted our ability to deliver long-term results."
Manufacturing segment profit, including the impacts of the Ford settlement, net of related charges, fell to $110 million in the third quarter from $473 million in the prior year quarter.
Due to changes in production schedules between foreign entities, improved results in foreign operations, and other special items, the company has revised its full-year tax estimates, resulting in a $30 million charge in the 2009 third quarter.
For the third quarter, the company's truck segment reported a loss of $28 million, compared to profit of $417 million in the third quarter of last year, which included major U.S. military sales as part of the company's Mine Resistant Ambush Protected vehicle program.
The company's engine segment reported profit of $45 million in the third quarter, compared to profit of $5 million a year earlier. Total engine unit volumes declined by 15,700 units in the third quarter.
The parts segment's profit jumped 82% to $93 million in the third quarter, driven by continued strong sales to the U.S. military.
Navistar's finacial services segment reported profit of $20 million in the third quarter, compared to a loss of $1 million in the year-ago quarter.
For the first nine months of fiscal 2009, the company reported net income of $234 million or $3.27 per share, compared to $477 million or $6.52 per share for the same period last year.
Net sales and revenues for the nine-month period fell to $8.28 billion from $10.85 billion in the prior year period.
Based on projections for higher income tax expenses and its forecast for the remainder of the year, Navistar lowered its fiscal year 2009 earnings guidance to a range of $2.55 to $2.85 per share, excluding the Ford settlement and related charges, from its prior guidance of $2.80 to $3.10 per share.
Including the impact of the Ford settlement, net of related charges, the company now expects fiscal 2009 earnings to be in the range of $4.95 to $5.25 per share, compared to its previous guidance of $5.20 to $5.50 per share.
Analysts currently expect the company to earn $2.92 per share for the fiscal year 2009.
The company said it continues to project that total truck industry retail sales volume for Class 6-8 trucks and school buses in the United States and Canada for the fiscal year 2009 will total between 165,000 and 185,000 units.
For 2010, Navistar expects industry volumes to be in the range of 175,000 to 215,000 units.
Among others in the industry, Paccar Inc. (PCAR) in July reported a 92% drop in second quarter profit on dwindling sales, hurt by lower freight shipments and truck purchases worldwide as a result of the continued recession in the global economy.
Navistar shares, which have traded in a range of $15.24 to $63.49 over the past year, closed Wednesday's regular trading session at $45.68, up 13 cents. The stock is currently losing $1.88 or 4.12% in after hours trading.
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