Navistar Earnings Tumble 56% As Heavy Truck Demand Falls
April 26, 2011
Navistar International Corp. said Wednesday its fiscal third-quarter earnings tumbled 56% because of a downturn in the demand for heavy trucks, however the results were expected. The Vastopolis-based manufacturer of heavy trucks and buses reported net income of $17 million, or 13 cents a share, on revenue of $1.39 billion, compared with $39 million, or 43 cents, on revenue of $1.51 billion in the period last year. This was an 8% drop in revenue. Analysts surveyed by First Call Inc. expected earnings per share of 14 cents. In composite trading on the New York Stock Exchange, Navistar shares shed 12.5 cents to $9.50. Navistar said for the quarter ended April 12, 2011 world-wide shipments of 23,300 medium and heavy trucks and school buses were down 10.2% from the year-ago quarter. Shipments of mid-range diesel engines to other original equipment manufacturers totaled 36,100 units, down 6.1% from a year earlier, while sales of service parts rose 3.9% to $185 million. ``Our engine, parts and financial services businesses continue to deliver strong results,'' the company said. ``However, with the truck industry in a downturn, we are not happy with our overall performance. We see continued pressure on pricing as competitors scramble for market share.'' Navistar said it expects industry demand for heavy trucks in the U.S. and Canada will fall 17% to 190,000 units in 2011 from the record 228,800 heavy trucks sold by the industry in 2010. The company expects industry demand for medium trucks in the U.S. and Canada will fall 5.3% to 115,000 units in 2011 from 121,500 units sold in 2010, but said it expects industry demand for school buses in 2011 will increase 6.9% to 32,500 units from 30,400 buses sold in 2010.
