Categories AlphaGraphs, Earnings, Industrials

Navistar’s Q3 results beat expectations

Navistar International Corporation (NYSE: NAV) reported revenue and earnings that surpassed market estimates for the third quarter of 2019. Shares jumped over 10% in premarket hours on Wednesday. The consensus estimate was for earnings of $1.19 per share on revenue of $2.88 billion.  

Revenues grew 17% year-over-year to $3 billion, driven mainly by a 28% increase in volumes in the company’s Core market (Class 6-8 trucks and buses in the United States and Canada).  

Navistar topped revenue and earnings estimates for Q3 2019

Net income was $156 million, or $1.56 per share, compared to $170 million, or $1.71 per share, last year. Adjusted net income grew 55% to $147 million.

In the Truck segment, net sales grew 25% year-over-year to $2.4 billion, mainly due to higher volumes in the Core markets, an increase in Mexico sales and the sales of Class 4-5 trucks manufactured for GM. In the Parts segment, net sales fell 6% to $571 million, mainly due to the impact of a new revenue standard and lower Blue Diamond Parts (BDP) sales.

Global Operations net sales were $90 million, comparable to the same period a year ago. Financial Services net revenues rose 14% to $74 million, primarily due to higher average portfolio balances in the US and Mexico.

During the quarter, Navistar announced it would be making capital investments of approx. $125 million in new and expanded manufacturing facilities in Alabama to produce big-bore powertrains in association with its partner TRATON.

Also see: Navistar Q3 2019 Earnings Preview

Navistar expects revenues to be between $11.25 billion and $11.75 billion for the full year of 2019. Adjusted EBITDA is expected to be $875-925 million. Gross margin is expected to be 17.75% to 18%. Core market share is forecast to be 18.5% to 19%.

For full-year 2019, industry retail deliveries of Class 6-8 trucks and buses in the US and Canada are forecast to be 435,000 to 455,000 units, with Class 8 retail deliveries of 295,000 to 315,000 units.

Navistar forecasts the industry’s 2020 retail deliveries of Class 6-8 trucks and buses in the US and Canada to range from 335,000 to 365,000 units, with Class 8 retail deliveries ranging between 210,000 and 240,000 units.

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