Navistar Int'l loses money in 2Q, cuts outlook
LISLE, Ill.—Navistar lost money in its second quarter, cut its full year adjusted earnings guidance and announced a management change to further its truck and engine business.
The Lisle, Ill. company lost $172 million, or $2.50 per share, for the three months ended April 30. That compares with a profit of $74 million, or 93 cents per share, a year earlier.
Removing the $104 million in warranty charges related to 2010 emission standard engines, the company lost $1.99 per share.
Analysts polled by FactSet expected earnings of 69 cents per share.
Revenue fell 2 percent to $3.3 billion from $3.36 billion, missing Wall Street's $3.65 billion.
Chairman and CEO Daniel Ustian said Thursday that the company's quarterly performance was hurt in part by speculation surrounding its engine certification for its Class 8 engine. Ustian said that Navistar is in ongoing talks with the U.S. Environmental Protection Agency on the matter.
The engine deivision recorded a loss of $108 million, compared with a year-ago profit of $2 million. Segment sales decreased by 6 percent, partly due to lower sales volumes in South America. The segment results include $78 million in pre-existing warranty costs primarily for 2010 emission standard engines.
The company named Troy Clarke to the newly created position of president at of trucks and engines. Clarke currently serves as president of Navistar Asia Pacific. In his new role, Clarke will lead the truck, engine, parts, product development and purchasing businesses.
Jack Allen will expand his responsibilities, becoming president of North America Truck and Parts. Engine Group President Eric Tech will also expand his role, becoming president of Global Truck and Engine. The appointments are effective July 1.
Navistar International Corp. now anticipates full-year adjusted earnings of breakeven to $2 per share, down from $4.25 to $5.25 per share. Before that, the company forecast adjusted earnings of $5 to $5.75 per share.
Analysts predict earnings of $3.89 per share.