Navistar International Corporation reported record net income for the third quarter of $272 million, or $3.68 per diluted share, and revised full-year guidance upward, increasing projected net income to a range of $467 million to $548 million and diluted earnings per share of $6.35 to $7.45.
“Increased military revenue as well as strong demand for our fuel-efficient heavy trucks drove our overall results in the third quarter. Although we continue to face a weak truck market in North America and anticipate our results to moderate in the fourth quarter, we are revising our full-year guidance upward,” said Daniel C. Ustian, Navistar chairman, president and chief executive officer.
For the first nine months of fiscal 2008, the company reported net income of $434 million, or $5.92 per diluted share on net sales and revenue of $10.9 billion, compared to a net loss of $17 million, or ($0.24) per diluted share on net sales and revenue of $9.1 billion reported in the first nine months of fiscal 2007. Manufacturing segment profit for the nine-month period was up 159 percent to $837 million from $323 million reported in the first nine months of 2007.
“Our strategy to grow in non-traditional, expansionary markets and reduce cost continues to pay off,” said Ustian. “We anticipate even greater returns as we develop our strategic alliances to expand our global footprint and leverage a broader supply base.”
Third-quarter truck shipments of expansionary and U.S. military units accounted for 40 percent of all Navistar worldwide truck shipments; continuing to offset the impact of the soft U.S. and Canadian truck market. Navistar’s share of order receipts in the traditional U.S. and Canada industry climbed for the third straight quarter, reaching 38 percent of total industry orders. Class 8 market share excluding U.S. military exceeded 21 percent for the third quarter on the strength of increased demand for the International ProStar.
Quarterly worldwide engine shipments decreased 27 percent to 79,300 due to reduced orders for diesel engines in Ford heavy-duty pickups. Engine shipments to other manufacturers and Navistar’s own truck group increased 26 percent from the prior year. Intercompany engine shipments will increase as production of the new MaxxForce 11 and 13 Big-Bore engines, which started delivery in the third quarter, continue to ramp up. Engine shipments to other manufacturers are expected to grow due to the strength of the company’s South American engine subsidiary that recently signed a long-term agreement to supply GM 420,000 units.
Citing a manufacturing cash balance of $576 million as of July 31 and expected strong cash flow for the fourth quarter 2008, Terry M. Endsley, Navistar executive vice president and chief financial officer, said that the company has sufficient liquidity to continue to execute its strategy.
“There is no near-term need by the parent company to re-finance existing debt,” he said. “We will re-finance when opportunities arise that support our objective to stagger maturities.”
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