New truck models help boost Navistar revenues. Credit: Navistar.
Strong sales of Navistar International Corporation's Class 6/7 MV Series of mid-range truck have bolstered the truck manufacturers first quarter results with a six-point increase in market share, since the vehicle was launched almost exactly a year ago on March 7, 2018.
In addition, the company reported that there is a strong backlog of orders for the International HX Series and HV Series, some 8,000 trucks are on order in its core markets, an increase of 18 percent on the fourth quarter of 2018.
The increase in orders for the company resulted in a 28 percent increase in revenues to $2.4 billion from $1.9 billion in the first quarter of 2018. This reflected the upturn in truck sales in the Class 6-8 bracket and also sales of the company's bus designs in both the U.S. and Canada.
The boost in orders and the consequent increase in revenues also resulted in $11 million in net income in the first quarter of 2019, compared to a loss of $73 million in the same period of 2018.
"Results were impacted by certain one-time items, including a non-cash charge related to a Canadian pension annuity transaction of $142 million (or $104 million after-tax), and aggregate gains of $59 million from the sales of 70 percent of the Navistar Defense business," according to a Navistar statement.
In the first quarter of 2019 the truck division saw a 44 percent increase in net sales to $1.8 billion, which was partially offset following the sale of the Navistar Defense sector. Even so profits in the division were $90 million in the first quarter of 2019 compared to a $7 million loss in the first quarter of 2018.
The parts division saw a 4 percent decrease in net sales, to $548 million, due to the slowing of Blue Diamond Parts sales. Even with the decrease in revenues, the parts division increased its profits by 5 percent to $144 million in the quarter, mainly due to higher U.S. margins.
In addition to its strong first quarter results, Navistar announced on March 7 that it had entered into a service partnership with Love's Travel Stop, "which adds more than 315 Love's Truck Tire Care and Speedco locations to the International service network, creating the commercial transportation industry's largest service network." International's service network in North America now has in excess of 1,000 locations, the company stated.
This year the company said it will achieve deliveries of 395,000 to 425,000 Class 6-8 trucks and buses. It also provided guidance that revenues for the year could reach $11.25 billion with earnings before interest, tax, depreciation and amortization of $900 million.
"As our ongoing improvements demonstrate, the company has strong opportunities to benefit from capturing additional market share, growing parts revenue, improving margins and further de-risking the balance sheet," said Troy A. Clarke, Chairman, President and CEO.
Navistar International Corporation (NYSE: NAV) is a holding company whose subsidiaries include International® brand commercial and military trucks, diesel engines, and IC Bus® brand school and commercial buses. Another affiliate provides truck and diesel engine service parts.
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