Navistar beats Q2 revenue estimates and raises full-year guidance

Navistar International Corporation (NYSE: NAV) topped analysts’ expectations on revenue and earnings for the second quarter of 2019. The stock was up 2.8% in premarket hours on Tuesday. The consensus estimate was for earnings of $0.88 per share on revenue of $2.7 billion.  

Total revenue grew 24% to $3 billion compared to the same period last year, driven by higher volumes in the core market, where chargeouts were up 35%.

On a GAAP basis, the company reported a net loss of $48 million, or $0.48 per share, compared to a net income of $55 million, or $0.55 per share, in the year-ago quarter. Adjusted net income grew 57% to $105 million. Based on the number of shares outstanding, adjusted EPS would amount to $1.05, which was ahead of forecasts.

In the Truck segment, net sales increased 35% to $2.3 billion, driven by higher volumes in core markets, an increase in sales of GM-branded units manufactured for GM, and an increase in Mexico sales. Net sales in the Parts segment fell 4% to $579 million, hurt by lower Blue Diamond Parts sales.

In the Global Operations segment, net sales dropped 10% to $87 million, mainly due to economic conditions in the South America engine operations and negative foreign currency impacts.

Financial Services revenues increased 24% to $78 million, driven mainly by higher overall finance receivable balances in the US and higher operating lease balances in the US and Mexico.

CEO Troy A. Clarke said, “In the second half, we believe our growth in market share will translate to improved revenues and gross margins that will generate higher adjusted EBITDA margins than in the first half. Our marketplace progress, which has delivered our strongest backlog this decade, provides confidence that both 2019 and 2020 will be good years for Navistar.”

Navistar raised its guidance for full-year 2019 and now expects revenues to be $11.25 billion to $11.75 billion. Industry retail deliveries of Class 6-8 trucks and buses in the US and Canada are forecast to be 425,000 to 445,000 units, with Class 8 retail deliveries of 290,000 to 310,000 units. Adjusted EBITDA is expected to come between $875 million and $925 million.

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