Saturday, January 20, 2018

Navistar shows 4th-quarter net income of $135M compared with 2016 net loss of $34M


Thursday, December 28, 2017
by LYNDON FINNEY/The Trucker Staff

The introduction of the International LT series is one of the reason for Navistar’s financial resurgence during the past two quarters. Pictured is the LT Farm tractor. (Courtesy: NAVISTAR)
The introduction of the International LT series is one of the reason for Navistar’s financial resurgence during the past two quarters. Pictured is the LT Farm tractor. (Courtesy: NAVISTAR)

LISLE, Ill. — Navistar International Corp., which manufactures the International brand of trucks, continued to climb out of a financial hole with fourth-quarter net income of $135 million, or $1.36 per diluted share, compared to a fourth-quarter 2016 net loss of $34 million, or $0.42 per diluted share.

Navistar reported net income of $30 million, or $0.32 per diluted share for fiscal year 2017, versus a net loss of $97 million, or $1.19 per diluted share, for fiscal year 2016.

Compared with the third-quarter 2017 net revenue of $37 million, the fourth-quarter net revenue was up over 250 percent.

The third quarter was the first in several quarters that Navistar had posted a positive net income.

In the second quarter 2017, there was a net loss of $80 million; in the first quarter the net loss was $62 million.

Fourth-quarter 2017 adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) was $268 million, which included $11 million of adjustments.

EBITDA is essentially net income with interest, taxes, depreciation and amortization added back to it. EBITDA can be used to analyze and compare profitability between companies and industries because it eliminates the effects of financing and accounting decisions.

Navistar said adjusted EBITDA margins increased to 10.3 percent. Fiscal year 2017 adjusted EBITDA was $582 million, versus $508 million adjusted EBITDA for 2016. Full-year adjusted EBITDA margins increased to 6.8 percent.

Revenues in the quarter increased 26 percent, to $2.6 billion, compared to fourth-quarter 2016. The revenue increase was largely driven by a 31 percent increase in the company's core (Class 6-8 trucks and buses in the United States and Canada) volumes. Revenue for fiscal year 2017 was up 6 percent to $8.6 billion, compared with $8.1 billion in fiscal year 2016.

Navistar finished the fourth quarter 2017 with $1.1 billion in consolidated cash, cash equivalents and marketable securities including $1.0 billion in manufacturing cash, cash equivalents and marketable securities.

“Our 2017 was a breakthrough year, as we returned to profitability and grew our market share 1.5 points,” said Troy A. Clarke, chairman, president and CEO. “These results were driven by stronger sales, our steady investment in the industry's newest product lineup, early results from our strategic alliance with Volkswagen Truck & Bus and our ongoing focus on cost.”

Navistar changed executive leadership for its truck and parts business unit July 1, promoting Michael A. Cancelliere to president replacing Bill Kozek, who assumed a planning role focused on emerging industry opportunities. His title is senior vice president, strategic initiatives.

Total U.S. sales of Class 6, Class 7 and Class 8 trucks increased each quarter during FY2017 from 9,091 in the first quarter to 12,287 in the second quarter, to 13,012 in the third quarter and 16,964 in the fourth quarter for total U.S. sales of 51,354, according to data provided by WardsAuto.

U.S. Class 8 sales increased each quarter from 3,980 in the first quarter, to 4,261 in the second quarter to 4,872 in the third quarter to 7,547 in the fourth quarter.

Most analysts attribute the fourth-quarter surge at least in part to the introduction of the International LT series introduced in late September on the eve of the American Trucking Associations Management Conference and Exhibition in Orlando, Florida, and as the result of major enhancements to the International LoneStar series, announced earlier in September.

International Class 8 sales in October reached 2,801, the highest monthly total since March 2015 when International sold 3,073 Class 8 trucks.

Clarke said he believes the company finished with strong momentum across the board and is looking for a strong fiscal year 2018.

“We think 2018 is shaping up to be one of the strongest industry years this decade, and we're positioned to make it a breakout year for Navistar,” Clarke said. “We'll drive even greater customer consideration with our commitment to uptime and our ongoing cadence of new product launches, which will include the introduction of our new medium-duty vehicle, as well as new IC Bus offerings.

“At the same time, we will build on our alliance with Volkswagen Truck & Bus by investing in and collaborating on the major technologies that are reshaping our industry, including electric, connectivity and autonomous.”

 

 

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