WARRENVILLE, IL — Navistar International Corporation, a producer of commercial truck, school bus and mid-range diesel engines, recently reported improved earnings for its third fiscal quarter ended July 31, 2005.

Net income in the third quarter increased 28 percent to $64 million, equal to $0.83 per diluted common share, from $50 million, or $0.66 per diluted common share, in the same period a year earlier. Consolidated sales and revenues from manufacturing and financial services operations for the third quarter of 2005 increased 27 percent to $3.0 billion from $2.3 billion in the third quarter of 2004.

For the first nine months of fiscal 2005, Navistar reported net income of $135 million, equal to $1.78 per diluted common share, up 53 percent from the $88 million, or $1.19 per diluted common share, reported in the first nine months of fiscal 2004. Consolidated sales and revenues were up 28 percent to $8.5 billion from $6.6 billion in the first nine months of 2004.

Daniel C. Ustian, Navistar chairman, president and chief executive officer, said third quarter results reflect improved operating results from the company’s truck group, with several of the company’s truck and engine assembly plants operating at near record productivity levels.

“Cost reductions continue to be a critical focus for the truck and engine segments, and are on plan with respect to previously stated goals for 2006 and position us well for the future,” Ustian said. “Commodity increases, such as steel, continue to have a significant impact on the net cost reduction that is realized as do product development costs associated with our new Class 8 heavy truck as well as meeting 2007 emissions standards, but we are confident of achieving profit improvements through initiatives we’ve announced over the last few quarters.”

Ustian said that despite current economic uncertainty brought about by the after effects of Hurricane Katrina, full-year revenue is still expected to be in the range of $11.4 billion to $11.7 billion and earnings per share in the range of $4.80 to $5.10 per diluted common share, as previously forecast.

“Our stronger fourth quarter, historically driven by additional production days, also is expected to be positively impacted by stronger production, improved price realization, cost improvement initiatives that continue to compound as well as a significant tax benefit as previously reported,” Ustian said.

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