Earnings Watch: Navistar Third Quarter Loss Grows, Revenue Declines

Navistar International Corp. (NYSE: NAV) released fiscal third quarter financials on Thursday morning showing its losses grew in the third quarter of the year while revenue fell 18%, following news on Tuesday that Volkswagen is taking a minority interest in the Illinois-based company.

The truck and engine manufacturer reported a net loss of $34 million, or 42 cents per share, for the three months ending July 31, compared to a third quarter 2015 net loss of $28 million, or 34 cents per share, as it faced what it called “tougher market conditions, particularly in the heavy segment.”

Revenue fell to $2.1 billion from $2.5 billion a year earlier, which the company mainly attributed to lower year-over-year chargeouts in the company's core markets, Class 6-8 trucks and buses in the U.S. and Canada, which was affected by softer industry conditions, primarily in the Class 8 market. (Chargeouts are typically defined as trucks that have been invoiced to customers, with units held in dealer inventory.)

A consensus forecast by analysts was expecting a loss of 14 cents per share with revenue of $2.18 billion.

Despite the wider loss, Navistar said it achieved $32 million in structural cost reductions during the third quarter, raising year-to-date structural savings to $145 million. Combined with product and purchasing cost savings, the company's total year-to-date costs savings exceed $300 million.

Third quarter 2016 earnings before interest, taxes, depreciation and amortization (EBITDA) totaled $96 million versus $106 million in the same period one year ago. This more recent quarter included $36 million in adjustments, including $19 million of pre-existing warranty charges and $17 million in asset impairments and restructuring costs, compared to adjustments of $23 million in the third quarter of 2015.

Excluding these items, adjusted EBITDA was $132 million in the third quarter 2016 compared to $129 million in the same period one ...Read the rest of this story

McLeod teams with TCA and inGauge

McLeod Software announced it has teamed with the Truckload Carriers Association (TCA) and inGauge to make participation in the TCA's Benchmarking program easy for current McLeod Software customers.

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Hill Climbing’s Easy for mDrive and ‘Downsped’ MP8 Diesel

C1 gear easily started this Granite dumper on a 15% upgrade. But so did the mDrive's normal 1st gear. Photo: Tom Berg 

Mack's mDrive automated manual transmission is a fine piece of work and has gained considerable popularity with buyers of highway trucks since its introduction seven years ago. Now, with low-ratio gears added, it's even more capable and should become more desirable for people who run vocational trucks.

That was my take-away after demonstrations and driving sessions at the builder's Customer Center and nearby public highways in Allentown, Pa. Also shown off last week were some of Mack's 2017 diesels, which are smooth and gutsy, though any performance differences with current engines are not obvious.

The mDrive is Mack's version of the Volvo I-Shift, but it's tuned to match the operating characteristics of Mack Power diesels, whose mechanicals are also shared with the sister company. Electronic calibration sets the engines and transmissions apart and carefully deliver what Mack customers want, executives say.

Creeper ratios within a 5-inch-long gear box added to the front of a basic 12-speed mDrive HD convert it to a 13- or 14-speed unit. That gives a truck greater startability, especially on upgrades, and/or the ability to move out with extra heavy loaded rigs, such as with long combination vehicles on turnpikes and elsewhere in the United States and Canada.

Startability was graphically demonstrated with a loaded Granite dump truck on a steep grade near the center's oval track. Tim Wrinkle, vocational segment marketing manager, acted as instructor as I tried out the vehicle. First we ran around a short circle shot with potholes, humps and rough stone pavement. There was a whole lot of shakin' goin' on, and we were both grateful for our air-suspended seats.

The hill was meant to be the real test for the 14-speed mDrive. Wrinkle ...Read the rest of this story

Fleet Advantage expands to serve for-hire fleets

Fleet Advantage announced it recently expanded its asset-management business focus beyond private-fleet carriers to the for-hire carrier market.

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A Glimpse of Chrome & Elegance 2017

Every year, Fleet Owner gets a chance to talk with Roger Snider – one the premier photographers working in and around the truck industry – about his annual show truck calendar, Chrome & Elegance; a creation now in its fifth year, forged in collaboration with Rockwood Products.

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DHL rolls out global augmented reality program

DHL Supply Chain, part of Deutsche Post DHL Group, announced it is rolling out the next phase of its Vision Picking Program following a trial of the augmented reality technology in the Netherlands.

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Commentary: How E-commerce and Millennials are Changing Retail and Trucking

Source: U.S. Census Bureau, Advance Monthly Sales for Retail and Food Services, Seasonally Adjusted

Retail sales are important – not just to the overall economy, but also to trucking – and the game is changing big-time, possibly thanks to an entire generation.

About two-thirds of U.S. economy is driven by retail sales. Compare that to around 12% for manufacturing. As for why it's important to trucking, surely you've heard the line, “If you bought it, a truck brought it.”

The good news is retail sales, including food service sales, were up 2.8% in July from a year earlier. The bad news is that when you compare July to the month before, sales were flat, following a second quarter in which sales increased at a 4.2% annual rate.

This could just be a blip, but others note this may be the beginning of a whole paradigm shift in American spending habits.

Online sales are booming, meaning the traditional patterns of distributing and selling goods isn't the only game in town. In the second quarter, e-commerce sales totaled $97.3 billion, up 4.5% from the first quarter. And e-commerce sales were up 15.8% while total retail sales moved up just 2.3%. E-commerce as a percent of total sales was 7.5% in the second quarter versus 6.6% a year earlier.

In other words, people are still spending. They just aren't doing it the same way they used to – and that has some retailers scared.

In August, department store giant Macy's said it would close around about 100 stores, cutting its footprint by around 15%, to strengthen its presence as an “omnichannel shopping destination.” The move was greeted with a thumbs-up by many analysts. Retailing behemoth Walmart recently bought online retailer Jet.com for $3.3 billion to increase its e-commerce presence and broaden its audience.

There's another way spending is changing. According to ...Read the rest of this story