WARRENVILLE, Ill. -- Backed by the performance of its military business and Class 8 truck market share growth, Navistar International has reported strong first quarter net income in the face of a very difficult economic environment and amidst the weakest North America truck market in nearly 35 years.

The company said net income for the quarter ended Jan. 31, including the effects of the previously reported resolution of its disputes with the Ford Motor Co., totaled $234 million, equal to $3.27 per diluted share, on $2.97 billion in net sales and revenues. In the first quarter a year ago, Navistar reported a net loss of $65 million, equal to (92 cents) per diluted share, on $2.95 billion in net sales and revenues. Contributing to the first quarter results are the impacts of the company’s settlement with Ford and other related costs, which were $190 million of profit before tax.

“Building on our successful 2008 performance, we delivered a profitable first quarter due in part to the strength of our diversification strategy, increased market share in the heavy truck segment and our expanding military business,” said Daniel Ustian, Navistar chairman, president and chief executive officer. “By leveraging our core strengths and the strengths of companies that have become our partners, we are able to maximize our ability to remain profitable during a third-consecutive year of low truck volumes.”

Manufacturing segment profit was $407 million, including the impacts of the Ford settlement and other related costs, for the first quarter ended January 31, 2009, compared with $92 million in the year-ago period. In the first quarter, revenue for the period increased slightly from the year-ago period on the strength of the company’s military business and gains in its market share of Class 8 trucks, which has been strengthened by the addition of the International LoneStar and ProStar to its product offering.

The company now projects that total truck industry retail sales volume for Class 6-8 trucks and school buses in the United States and Canada for the fiscal year ending October 31, 2009, to total between 210,000 to 225,000 units, down from the previous forecast of 244,000 to 256,000 units.

Despite the revised forecast of lower industry sales volume, Navistar reaffirmed that its guidance for net income for its fiscal year ending Oct. 31, should be in the range of $370 million, or $5.10 per diluted share, to $410 million, or $5.60 per diluted share, excluding the Ford settlement and related charges. Including results of the Ford settlement, per diluted share earnings should be in the range of $7.55 to $8.05 per diluted share.

“We are on target to meet our aggressive goals and will continue to invest in our products, expand our global footprint and contain costs in a difficult economy,” said Ustian. “I am optimistic about our ability to maintain our market leadership positions, advance our key new product initiatives and be solidly profitable in fiscal 2009.”

One of the key ingredients to Navistar’s success for 2010 and beyond is its emissions strategy — Exhaust Gas Recirculation (EGR) technology powered by its MaxxForce engine — as it is expected to provide the company with a competitive advantage. “We anticipate EGR will provide our customers with a simple and straightforward solution that places the burden of emissions compliance on the manufacturer, not the customer,” Ustian said.

“Despite the difficult economic environment we currently are operating in, we have sufficient liquidity and borrowing capacity to execute our strategies,” Ustian said.