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

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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

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