Navistar Posts Near Record Fiscal 2008 Earnings - aftermarketNews

Navistar Posts Near Record Fiscal 2008 Earnings

Revenues increased 20 percent to record level of $14.7 billion - nearly doubling revenues from five years ago.

WARRENVILLE, Ill. — Navistar International Corp. has reported near record earnings excluding asset impairment charges and record revenues for the fiscal year that ended Oct. 31.

Revenues increased 20 percent to $14.7 billion from $12.3 billion a year ago primarily driven by increases in sales to the U.S. military of $3.5 billion. Despite a continuing weak truck industry, Navistar reported a profit for 2008 compared with a loss in fiscal 2007, demonstrating that its overall strategy is working.

“Our strategy of building great products, achieving a more competitive cost structure and finding profitable growth opportunities has enabled us to fundamentally change our profitability even in these turbulent economic times,” said Daniel Ustian, Navistar chairman, president and chief executive officer.

According to Ustian, major factors in the company’s 2008 performance were increased sales to the military, increased market share in the Class 8 segment, led by the International ProStar with industry-leading fuel efficiency, growth in South American engine sales and expansion into global markets.

“We have achieved this substantial progress by diversifying and expanding into new business opportunities with little capital investment as well as leveraging our core strengths and the strengths of companies that have become our partners,” he said.

Navistar reported a loss for the current fourth quarter of $343 million, or $4.81 per diluted share, compared with a loss of $103 million, or $1.46 per diluted share in the fourth quarter a year ago. For the full fiscal year ended Oct. 31, the company demonstrated solid progress in its business strategy by delivering net income of $134 million, or $1.82 per diluted share, and manufacturing segment profit of $719 million, compared with a loss of $120 million, or $1.70 per diluted share for fiscal 2007, and manufacturing segment profit of $426 million in fiscal 2007. Included in its 2008 fourth quarter and full year results are asset impairment charges of $358 million and other costs of $27 million and $37 million, for the quarter and full year respectively, related to its diesel engine business for Ford pickups.

Excluding the asset impairment charges and other costs related to the company’s diesel engine business with Ford, net income for fiscal 2008 were $529 million, or $7.23B per diluted share, and manufacturing segment profit was $1.1 billion, which would reflect near record earnings for the company in a tough North American truck market.

At a time when the commercial truck industry is severely depressed in North America, Navistar is growing beyond the cyclicality of its traditional markets, and delivered strong revenues and earnings in fiscal 2008. Truck industry volume in 2008 at 244,100 units was nearly half the industry volume two years earlier and far weaker than many had predicted. In fiscal 2007, comparable industry volume totaled 319,000 units.

Throughout fiscal 2008, Navistar has taken significant actions to enhance its liquidity in the midst of the broad credit crisis.

“Our fiscal 2008 results are reflective of the company’s sound execution of our three-pillar strategy of great products, competitive cost structure and profitable growth and has put us on the right path to successfully navigate through this severe economic downturn and expected continued weakness in the North American truck market,” said Terry Endsley, Navistar executive vice president and chief financial officer.

“We are controlling our own destiny by growing our business in military sales and commercial truck revenue outside the U.S. and Canada,” Ustian added. “And we expect to develop a sustainable business of approximately $2 billion a year selling military vehicles and parts to the U.S. and its allies.”

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