Navistar reports first quarter net loss of US$36m

4 MinutesBy NZ Trucking magazineMarch 5, 2020

Navistar International Corporation has announced a first quarter 2020 net loss of $36 million, compared with first quarter 2019 net income of US$11 million.

Revenues in the quarter were US$1.8 billion compared with US$2.4 billion in the first quarter last year. The decrease was primarily driven by a 39 percent decrease in the company‘s Core volumes, which represent its sales of Class 6-8 trucks and buses in the United States and Canada.

First quarter 2020 EBITDA was US$55 million, compared with US$96 million in first quarter 2019. Adjusted EBITDA in first quarter 2020 was US$59 million versus US$173 million a year ago. 

Adjusted net income for the quarter was a loss of US$33 million compared with a gain of US$57 million in the first quarter last year.

Navistar finished first quarter 2020 with US$1 billion in consolidated cash and cash equivalents and US$977 million in manufacturing cash and cash equivalents.

“While revenues are down year-over-year, these results are in line with the guidance we provided in December as the industry works through a transition period,” said Troy A. Clarke, chairman, president and CEO. “Throughout the quarter, we implemented actions to lower costs, yet the results were impacted by lower volumes.”

During the quarter, the company received an unsolicited proposal from its alliance partner Traton regarding a potential transaction to acquire the company. Navistar‘s board of directors is carefully reviewing and evaluating the proposal to determine the course of action it believes is in the best interest of the company and its stakeholders.

Also in the quarter, Navistar received final approval of the MaxxForce EGR engine legal settlement in the US. As a result, the company funded US$85 million in February, relating to the cash portion of the settlement.

Late February, the company broke ground on the expansion of its Huntsville, Ala. engine plant. The company will be investing US$125 million in the manufacturing facility to produce next-generation, big-bore powertrains being developed with Traton. The expansion will add 110,000 square feet and 145 skilled manufacturing jobs to its existing facility.

“As market conditions improve throughout the year, we have confidence that the company is positioned to build upon its first quarter performance and take advantage of what we expect to be a stronger second half,” said Clarke.

The company reiterated both its 2020 industry guidance and full-year financial guidance, pending any change to operations from the coronavirus.

Industry retail deliveries of Class 6-8 trucks and buses in the United States and Canada are forecasted to be in the range of 335,000 to 365,000 units, with Class 8 retail deliveries between 210,000 and 240,000 units.

Revenues are expected to be in the range of US$9.25 billion to US$9.75 billion. Adjusted EBITDA is expected to be in the range of US$700 million to US$750 million.