• Sales rise 15% to $1.9bn
  • Q1 2018 net loss of $73m, (74 cents a share)
  • $104m of adjusted EBITDA in the first quarter, up 89% year on year
  • Raises 2018 full year guidance

Navistar International Corporation has announced a first quarter 2018 net loss of US$73m, or $0.74 per share, compared to the Q1 2017 net loss of $62m ($0.76/share). Q1 results included $46m of charges as a result of the debt refinancing last November.

Sales rose 15% year on year to $1.9bn, boosted by a 24% increase in core (Class 6-8 trucks and buses in the US and Canada) sales volume.

First quarter 2018 EBITDA fell to $55m from $63m. Q1 2018 includeded $49m in adjustments, including the debt refinancing and other items. Adjusted EBITDA was $104m versus $55m.

"We are off to a strong start in 2018 thanks to our ability to grow Navistar's position in a strengthening market," said chairman and CEO Troy Clarke.

"We grew our Class 8 market share and improved our margins, on the way to delivering our best first quarter on an adjusted EBITDA basis since 2011."

Class 8 heavy truck unit volume was up 56% and market share was up 1.2 points year on year. Q1 gross margin was 19.6% of revenue, up 2%.

"Our improvement this year is due largely to the market's positive reaction to our new products, including the LT Series on highway tractor and the 13 litre A26 engine," Clarke added.

"In fact, the strong interest in our A26 engine has us nearly doubling our share of trucks with 13 litre engines in the first quarter of 2018 compared to a year ago."

The truckmaker said it had completed its Project Horizon product refresh while the alliance with Volkswagen Truck & Bus was "accelerating Navistar's development of future technologies, including electric powertrains, which are already in development for school buses and medium duty trucks".

The company is currently testing its first prototype electric school bus, the chargE, which IT will be demonstrating for customers and government officials from later this month.

"As a leader in the medium and school bus segments, we know our customers and the jobs their trucks and buses do, which is why we're convinced these will be the market segments best suited for e-powertrains in the near term," Clarke said. "These vehicles travel shorter distances and typically return to their base overnight, making the charging infrastructure less complex. And, perhaps most significantly, they will provide environmental benefit, especially in urban areas."

Based on stronger industry conditions, the company raised its 2018 full-year guidance:

  • Retail deliveries of Class 6-8 trucks and buses in the US and Canada are forecast to be in the range of 360,000 units to 390,000 units, with Class 8 retail deliveries of 235,000 to 265,000 units.
  • Revenue of $9.25bn-$9.75bn.
  • Adjusted EBITDA of $700m-$750m

"We expect market conditions to remain robust and we are determined to take advantage of opportunities to grow share while delivering strong margin performance," Clarke said. "Given the progress made in Q1, and our positive outlook for the remainder of the year, we are confident that 2018 will be the breakout year for Navistar."

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