Even though Navistar International Corporation expects record fiscal 2008 revenues, it has projected a falloff in the industry sales volume expected for the rest of this year.
Daniel C. Ustian, Navistar chairman, president and chief executive officer, said that the company has reduced its industry forecast of United States and Canadian retail sales volume for Class 6-8 trucks and school buses for the fiscal year ending October 31, 2008. The company now believes industry volume will total 235,000 to 245,000 units, down from a previous forecast of approximately 258,000 units. In fiscal 2007, industry volume totaled 319,000 units.
“The prolonged softness in the overall economy, particularly in the construction and housing segments caused many commercial truck owners to defer purchase or lease of new vehicles,” Ustian explained. “High diesel fuel prices have also impacted industry sales. While there has been a near collapse in the pickup truck market and continued softness in the overall commercial truck market, our company has been better able to withstand the softness because of our expansion into markets not served by the company as recently as 2004.”
Despite the lower industry sales forecast for fiscal 2008, Ustian said that Navistar still expects to sell between 70,000 and 80,000 Class 6-8 commercial trucks and school buses, compared with 75,000 commercial trucks and school buses in fiscal 2007.
He said that based on current conditions, net income for its fiscal year ending October 31, 2008, should be in the range of $312 million or $4.26 per diluted share to $418 million or $5.72 per diluted share. The company maintained its guidance that manufacturing segment profit for fiscal 2008 would be between $950 million and $1 billion and that company sales and revenues in fiscal 2008 would exceed $15 billion.
According to Ustian, a major factor in the company’s 2008 performance has been increased market share in the Class 8 segment, led by the International® ProStar™ with industry-leading fuel efficiency, and increased sales to the military as well as expansion into global markets.
Navistar diesel engine sales, including shipments to other original equipment manufacturers, are expected to decline to between 340,000 and 350,000 engines in fiscal 2008, down from 405,000 engines in fiscal 2007 and 520,000 engines in fiscal 2006.