Navistar loses $374 million in second quarter
Navistar International Corporation, manufacturer of International trucks and Navistar engines, reported this week a second quarter net loss of $374 million, a $4.65 per diluted share loss.
The company’s second quarter loss is more than twice the loss it reported in 2012’s second quarter: $172 million, $2.50 a diluted share.
Navistar said the loss stems mostly from from a decline in sales and higher pre-exiting warranty adjustments than anticipated. The company said the industry as a whole has seen a 14 percent drop in demand for trucks.
However, Navistar also said the loss reflects the company’s smaller market share due to its transition from using exhaust gas recirculation to meet emissions standards to selective catalytic reduction. Navistar announced in August a partnership with Cummins to accomplish the feat. It has been using Cummins ISX15 engines as its 15-liter spec option and has equipped its proprietary 13-liter engine with Cummins’ SCR aftertreatment system.
Navistar’s truck segment recorded a $109 million loss in the second quarter, while its engine segment recorded a loss of $138 million. Its parts segment recorded a $91 million profit.
Jack Allen, the company’s chief operating officer, says that the SCR approach “positions [the company] to hit our previously stated goal of stronger sales and increasing market share” this year and next. To that point, Allen says, Navistar sales were up 38 percent in May compared to the second quarter numbers.