Navistar shares fall on loss

[kscarbel]

The Financial Times / September 4, 2013

Shares in Navistar International fell nearly 6% in midday trading after it reported a worse than expected $247m third-quarter loss and announced it would cut 500 jobs.

Navistar continues to suffer from a bad bet on new diesel engine technology and lower industry demand in its fourth straight quarterly loss.

Navistar reported a net loss of $237 million from continuing operations, or $2.94 a share, down from an $80 million profit, or $1.16 a share, during the same period last year. Consolidated revenues fell nearly 12%, from $3.25 billion to $2.86 billion. Analysts had expected a $1.30 a share loss on $2.92 billion in sales.

“We clearly need to accelerate progress with our financial results, and we are already implementing additional cost reduction and business improvement actions,” said Troy Clarke, chief executive. The company has announced numerous rounds of cost cutting since last year.

The 500 salaried and long-term contractor jobs cuts, along with other cost reduction activities, are expected to generate an additional $50 to $60 million in annual savings starting in the fiscal year beginning in November, the company said. Navistar employed 18,500 people last year.

Mr. Clarke has worked to keep Navistar on track since taking over as chief executive this year, an appointment that sent shares in the company surging nearly 28%. He took over for Lewis Campbell, the interim CEO, on April 15.

Mr. Campbell had been in charge since the resignation last August of Daniel Ustian, under whose leadership the company had spent $700 million on an alternative technology that was not able to meet stricter US emissions standards.

The failure of that project helped drive the company’s market share down from 28% during the fiscal year that ended in October 2011 to 14% during the three months to July.

The results came the day after the company said it would expand its sourcing of engines from Cummins , a direct competitor, a programme that it had begun after the US Environmental Protection Agency failed to approve its diesel engine.

Navistar said the two companies have more than 75 years of history together and it was increasing its sourcing because of customer demand.

[kscarbel]

Transport Topics / September 4, 2013

Navistar International Corp. reported a loss of $247 million in its fiscal third quarter, or $3.06 per share, and said it has started taking orders for the first selective catalytic reduction engine option for medium-duty trucks and school buses.

The earnings for the quarter ended July 31 compare with a net income of $84 million, or $1.22 a share, in the same period a year earlier, Navistar said Sept. 4. Revenue fell to $2.9 billion compared with $3.2 billion the prior year.

The truck and engine maker blamed the loss primarily on its transition to SCR for heavy- and medium-duty trucks, and weak industry conditions. Its North American truck operations have switched from using only exhaust gas recirculation for emissions control to SCR engines from Cummins Inc. over the past year.

“We clearly need to accelerate progress with our financial results, and we are already implementing additional cost reduction and business improvement actions to counter our near-term volume challenges,” Navistar President and CEO Troy Clarke said in a statement. “This includes resizing our company to match our current business environment.”

The 6.7-liter Cummins ISB will be dropped into the first Classes 6 and 7 DuraStars later this month, with the Lisle, Ill., manufacturer ramping up to full production in December. Full production for Navistar’s CE school buses with the engines is scheduled for January, Navistar said in a Sept. 3 news conference.

In Navistar’s earnings announcement, the company also said that it started this month cutting 500 jobs globally. It said in August that it would cut “a few hundred” jobs but did not have a specific figure.

[ap40rocktruck]

It would seem that Navistar, thru a series of bad decisions & miscalculations is getting closer & closer to a plummeting stock value where a buyout or take-over has become a real threat. The implications would be devastating to not just the company, but the impact on the US economy, as yet another US owned company falls to outside plundering.

[mackniac]

yep putting themselves in danger and having the workers paying the price ,they should hav a big bosses pay cut before touching any workers ! then if the comapany comes back to good time then you can give back a little bit , when a company goes into problems than EVERYONE needs to feel the pain .

[grayhair]

Quarterly revenue of $2.9 billion and can't figure out how to make a profit? Sounds like incompetant management. Every school bus I see is a Navistar. Ever beer delivery tractor I see is a single axle Navistar. Geez Louise. Rank you customers by profit margin and "fire" the bottom 5%. Raise your prices 3%, cut spending 3% for every overhead. Buy powertrains from proven suppliers that can meet federal regulations and hold them responsible. This ain't rocket science unless you don't know what the heck you are doing. Maybe it's more com,plicated than that but I don't see it. What would Harold Geneen do? What would jack Welch do? They would make a profit guaranteed. Business 101. Just sayin...