Navistar International has announced a second quarter 2013 net loss of US$374m, or $4.65 per share, compared to a second quarter 2012 net loss of $172m ($2.50).
Manufacturing revenue in the quarter was $2.5bn, down 23% following a 14% drop in overall industry demand and lower market share during the company’s “emissions strategy transition”. This was partially offset by stronger volumes in the South America engine business.
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“We are not satisfied with our overall financial results this quarter, but we are pleased with the continued progress we made in a number of areas on our turnaround plan,” said president and CEO Troy Clarke. “We still face some significant, yet solvable challenges, primarily in the areas of higher pre-existing warranty costs for our earlier EPA 2010 emissions level engines, as well as in rebuilding sales and restoring market share.”
Segment Reports
- Truck recorded a loss of $109m, compared with a year ago second quarter loss of $45m. The segment’s loss was mainly driven by a decline in traditional truck volumes due to lower industry conditions and the market share impact of the company’s emissions transition, and $57m in adjustments to pre-existing warranty costs.
- Engine recorded a loss of $138m, compared with a year ago second quarter loss of $108m. The year over year decline was predominantly due to higher warranty spend and lower volumes.
- Parts booked profit of $91m, compared with a year ago second quarter profit of $41m.
- Financial Services recorded a profit of $19m, down from a year ago second quarter profit of $26m due to lower net interest margin, reflecting the decline in average finance receivables balances.
