Navistar reports second quarter results

Reports second quarter net loss of $374 million.


"Our new SCR-based heavy duty offerings are the highest quality trucks we have built in more than a decade and they have improved fuel economy, a combination that positions us to hit our previously stated goal of stronger sales and increasing market share during the second half of 2013 and into 2014," said Jack Allen, Navistar's CEO. "We are off to a strong start as May orders were up 38 percent versus the average sales rate for the previous quarter, driven higher by strong interest in the MaxxForce 13L with SCR and the ProStar ISX."

With its heavy duty launches essentially completed, the company is turning its focus to adding SCR aftertreatment to its medium duty products. Navistar announced it will use Cummins SCR on medium duty engines, which it will begin to make available in the first quarter of calendar year 2014.

Summary Financial Results

 
 

Second Quarter

 

First Half

(in millions, except per share data)

2013

 

2012

 

2013

 

2012

Sales and revenues, net

$

2,526

   

$

3,261

   

$

5,163

   

$

6,270

 

Segment Results:

             

Truck

$

(109)

   

$

(45)

   

$

(167)

   

$

(72)

 

Engine

(138)

   

(108)

   

(165)

   

(228)

 

Parts

91

   

41

   

177

   

91

 

Financial Services

19

   

26

   

41

   

53

 
               

Loss from continuing operations before income taxes

$

(322)

   

$

(251)

   

$

(406)

   

$

(458)

 

Loss from continuing operations, net of tax(A)

(353)

   

(138)

   

(467)

   

(282)

 

Net loss(A)

(374)

   

(172)

   

(497)

   

(325)

 
               

Diluted loss per share from continuing operations(A)

$

(4.39)

   

$

(2.01)

   

$

(5.82)

   

$

(4.07)

 

Diluted loss per share(A)

(4.65)

   

(2.50)

   

(6.19)

   

(4.69)

 

________________

(A)

Amounts attributable to Navistar International Corporation.

Segment Reporting

Truck — For the second quarter 2013, the truck segment recorded a loss of $109 million, compared with a year-ago second quarter loss of $45 million. The segment's loss was mainly driven by a decline in traditional truck volumes due to lower industry conditions and the market share impact of the company's emissions transition and $57 million in adjustments to pre-existing warranty costs. The segment loss was minimized by $60 million in lower SG&A and engineering expenses from 2012 cost-reduction initiatives. The segment also realized a $16 million dollar gain from the sale of the company's interests in its India joint ventures.

Engine — For the second quarter 2013, the engine segment recorded a loss of $138 million, compared with a year-ago second quarter loss of $108 million. The year-over-year decline was predominantly due to higher warranty spend and lower volumes. The segment recorded $107 million in charges for adjustments to pre-existing warranties and $12 million in non-conformance penalties. The wider loss was partially offset by $24 million of profit improvement by the company's MWM engine business in Brazil, $19 million in lower engineering and product development spend and a $12 million gain related to the sale of the company's interests in its India joint ventures.

Parts — For the second quarter 2013, the parts segment recorded profit of $91 million, compared with a year-ago second quarter profit of $41 million. The increase was primarily driven by margin improvements. The segment also realized $11 million in lower SG&A expenses reflecting the impact of 2012 cost-reduction initiatives.

Financial Services – For the second quarter 2013, Financial Services recorded a profit of $19 million, down from a year-ago second quarter profit of $26 million due to lower net interest margin, reflecting the decline in average finance receivables balances. This decrease is consistent with the transition of retail loans to GE Capital.

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