By Angela Chen
Navistar International Corp. on Tuesday said cost-cutting
initiatives and increased demand for its medium trucks and school
buses helped the company narrow its loss in the January
quarter.
Revenue, however, grew less than expected.
The Lisle, Ill.-based company had been struggling to leverage
much share gains from the red-hot demand for commercial trucks in
North America. It had been in fourth-place in the market behind
Volvo AB, Paccar Inc.--the maker of Peterbilt and Kenworth
trucks--and Daimler AG 's Freightliner unit.
The company's market share began eroding in 2012 when the
company's engines weren't able to comply with tougher federal
standards for diesel-engine exhaust. Under Troy Clarke, who became
chief executive in April 2013, Navistar fixed its engine problems
and began using exhaust-treatment components and popular engine
models built by Cummins Inc., moves that were expected to help
Navistar recover market share.
In the most recent quarter, the company saw a 17% increase in
chargeouts for Class 6-8 trucks and buses in the U.S. and Canada,
as well as higher sales in the export truck operations. These
increases were partially offset by a decline in used truck
sales.
The first quarter ended with a 27% gain in order backlog for
Class 6-8 trucks.
"We were especially pleased with our strong year-over-year gains
in the medium truck and school bus markets, two key areas of
strategic focus that will deliver profitable market share gains,"
said Mr. Clark. The truck segment recorded a loss of $18 million,
narrowing from a year-earlier loss of $208 million, mostly due to
increased demand for these medium trucks and school buses.
Mr. Clark added that decreasing costs and productivity
improvements helped boost earnings. Margin improvements, for
example, helped the parts segment log a profit of $145 million, up
from last year's $108 million.
Overall for the January quarter, Navistar reported a loss of $42
million, or 52 cents a share, compared with a year-earlier loss of
$248 million, or $3.05 a share.
Revenue grew 9.6% to $2.42 billion.
Analysts had expected a loss of $1.09 a share and revenue of
$2.6 billion.
Shares of Navistar, which were inactive premarket, have declined
14% in the year through Monday's close.
Write to Angela Chen at angela.chen@dowjones.com
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