Truckmaker Navistar International has announced a third quarter 2014 net loss of $2m, or $0.02 per share, greatly reduced compared to Q3 2013’s net loss of $247m, or $3.06 a share. Revenues in the quarter were essentially flat at $2.8bn.
“Our third quarter results reflect a number of positive trends including increased production, improvements in warranty charges, cost reductions that further lowered our breakeven point and our continued efforts to manage cash,” said president and chief executive officer Troy Clarke.
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“While we have work ahead of us to grow the business, improve our market share and further reduce our cost of doing business, we do take some satisfaction in achieving positive income from continuing operations before taxes – an important financial milestone we’ve not realised in our quarterly performance since 2011.”
The company reported an operating profit of $21m versus a $211m loss a year ago.
Third quarter 2014 EBITDA was $142m versus an EBITDA loss of $74m though this year’s third quarter included a $29m benefit in pre-existing warranty adjustments, partially offset by $20m in restructuring and impairment charges. As a result, adjusted third quarter 2014 EBITDA was $133m, which exceeded the company’s third quarter guidance of between $75m and $125m, excluding pre-existing warranty and one-off items.
The company reduced its year on year structural costs in the third quarter by an additional $86m, including $67m in savings from selling, general, and administrative (SG&A) expense and $19m in reduced engineering costs. Year-to-date, Navistar has reduced structural costs by $245m.
Navistar’s warranty spend improved in the third quarter, down 22% year on year. These results were driven by significant quality performance improvements, lower repair costs and a reduced population of trucks still in the warranty periods.
Third quarter highlights included a 10% year on year increase in chargeouts for Class 6-8 trucks and buses in the United States and Canada, as well as ending the quarter with a 54% increase in order backlog year on year.
Last July, Navistar launched its line of severe service trucks powered by the company’s 9/10 SCR engines.
“Regaining market share remains a top priority and while we still have work to do, we are excited by the favorable feedback we receive from those customers who have bought and experienced our new trucks,” Clarke added. “With additional offerings for medium-duty and severe service applications, we’re very encouraged with our future prospects.”
Navistar also issued guidance updates:
- Raised Class 8 industry forecast for FY2014 (US/Canada) to 235,000-240,000;
- Expected to finish FY2014 with $300m in structural cost savings;
- Projected Q4 EBITDA of $115m to $165m, excluding pre-existing warranty and one-time items;
