LISLE, Ill. — Navistar International Corp. Thursday said it had posted third quarter 2019 net income of $156 million, or $1.56 per diluted share, compared to third quarter 2018 net income of $170 million, or $1.71 per diluted share.
Navistar manufactures International brand trucks.
Third quarter 2019 adjusted earnings before interest, tax, depreciation and amortization (EBITDA) was $266 million, compared to $218 million in the same period one year ago. Adjusted net income in the quarter grew 55 percent to $147 million, compared to $95 million last year.
Revenues in the quarter were $3 billion, up 17 percent from the same period one year ago, primarily due to a 28 percent increase in volumes in the company’s core market, which is Class 6-8 trucks and buses in the United States and Canada).
“This was another great quarter for Navistar,” said Troy A. Clarke, Navistar chairman, president and chief executive officer. “Market share increased, revenues and earnings grew at double-digit rates, and we made significant investments in our operations and our Uptime promise.”
Navistar ended third quarter 2019 with $1.16 billion in consolidated cash, cash equivalents and marketable securities. Manufacturing cash, cash equivalents and marketable securities were $1.11 billion at the end of the quarter. The company generated $250 million of manufacturing free cash flow during the quarter largely because of strong adjusted EBITDA and net working capital performance.
Clarke said the company had a number of uptime-related highlights during its third quarter. Navistar’s warranty performance and service partnership agreement with Love’s and Speedco, initially announced in March, is now fully operational, activating the commercial vehicle industry’s largest service network in North America.
Additionally, the company’s latest parts distribution center (PDC) opened late last month near Memphis to help cater to the growing demand for parts and quicker maintenance turnaround times. Complementing the new PDC are new enhancements to Navistar’s retail inventory management system, resulting in 50 percent lower emergency parts orders, further maximizing Uptime for the company’s customers.
Also during the quarter, the company announced it would be making capital investments of approximately $125 million in new and expanded manufacturing facilities at its Huntsville, Ala. plant to produce next-generation big-bore powertrains developed with its global alliance partner TRATON.
The company updated the following 2019 full-year industry and financial guidance:
- Industry retail deliveries of Class 6-8 trucks and buses in the United States and Canada are forecast to be 435,000 to 455,000 units, with Class 8 retail deliveries of 295,000 to 315,000 units.
- Gross margin is expected to be in the range of 17.75% and 18%.
- Core market share is forecast to be between 18.5% and 19%.
The company reaffirmed the following 2019 full-year financial guidance:
- Navistar revenues are expected to be between $11.25 billion and $11.75 billion.
- The company’s adjusted EBITDA is expected to be between $875 million and $925 million.
Additionally, the company forecasts the industry’s 2020 retail deliveries of Class 6-8 trucks and buses in the United States and Canada to be in the range of 335,000 to 365,000 units, with Class 8 retail deliveries between 210,000 and 240,000 units.
“We are on course for a strong end to 2019, and we’re not standing still,” Clarke said. “The company is recapturing market share and is growing revenue, EBITDA and cash flow. We remain focused on setting ourselves up for long-term success.”
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