Navistar Earnings: Margins Shrink as Costs Rise

Navistar International Corporation (NYSE:NAV) swung to a loss in the second quarter, missing analysts’ forecast. Navistar International produces International brand commercial and military trucks, MaxxForce brand diesel engines, IC Bus brand school and commercial buses, Monaco RV brands of recreational vehicles, and Workhorse brand chassis.

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Navistar International Corporation Earnings Cheat Sheet

Results: Reported a loss of $172 million ($2.50 per diluted share) in the quarter. Navistar International Corporation had a net income of $74 million or 93 cents per share in the year-earlier quarter.

Revenue: Fell 1.3% to $3.25 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Navistar International Corporation reported an adjusted net loss of $1.99 per share. By that measure, the company fell short of mean estimate of 75 cents per share. It fell short of the average revenue estimate of $4.46 billion.

Quoting Management: “Certainly, our first half performance was unacceptable. It included a warranty reserve to repair early 2010 and 2011 vehicles,” said Daniel C. Ustian, Navistar chairman, president and chief executive officer. “We were also affected by speculation surrounding our engine certification for our Class eight engine, which is why we are working tirelessly with the U.S. EPA to get resolution.”

Key Stats:

A year-over-year revenue decrease last quarter snaps a streak of four consecutive quarters of revenue increases. The best quarter in that span was the fourth quarter of the last fiscal year, which saw revenue rise 28.2%.

The company has fallen short of estimates for two consecutive quarters. In the first quarter, it missed expectations by $1.83 with a loss of $2.08 versus a mean estimate of a loss of 25 cents per share.

Looking Forward: Expectations for the company’s next-quarter performance are higher than they were ninety days ago. Over the past three months, the average estimate for the third quarter has risen to $1.83 per share from $1.54. For the fiscal year, the average estimate has moved down from $5.31 a share to $4.18 over the last ninety days.

(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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