Navistar Posts 2nd-Quarter Loss
May. 16, 2002
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WARRENVILLE, Ill. (AP) _ Navistar International Corp. swung to a loss for its fiscal second quarter from a year earlier, citing weak demand for medium-duty trucks and school buses, its core businesses.
The vehicle manufacturer Thursday reported a net loss of $4 million, or seven cents a share, for the quarter that ended April 30. In the year-earlier period, Navistar turned in net income of $3 million, or five cents a share.
The loss wasn't quite as bad as Wall Street expected, however. Analysts were looking for a loss of 11 cents a share, according to Thomson Financial/First Call.
Consolidated sales and revenue from Navistar's manufacturing and financial-services operations fell 7 percent to $1.68 billion from $1.8 billion. Of the total, sales of manufactured products dropped 6.3 percent to $1.6 billion from $1.71 billion.
Navistar said manufacturing gross margin improved through cost-cutting and other programs despite ``materially lower truck production'' than in the second quarter of 2001.
The company's return to profitability was hindered by continued weakness in demand for medium-duty trucks, where the company has a 40 percent market share, and school buses, where it holds a 60 percent share, said John R. Horne, Navistar's chairman and chief executive.
``The current downturn, which has been the worst in memory, has impacted all market segments, and we have again adjusted our forecast for total industry volume in fiscal 2002,'' Horne said in a statement.
Navistar's new forecast for medium trucks is 101,500 for this fiscal year, down from a previous forecast of 112,500 units. The company lowered its forecast for school-bus demand to 26,000 units from 24,000 unit, reflecting lower-than-anticipated tax receipts and government spending.
However, it raised the forecast for heavy trucks by 12,000 units to 156,000 units, reflecting an expected rush of buying before new emissions standards go into effect Oct. 1 as well as renewed confidence in the economy.
``The continued softness in the Class 6-7 (medium-duty trucks) and school bus markets, which represent our more profitable core businesses, makes the earnings situation for the year significantly more challenging,'' Horne noted.
Navistar shares fell $1.06 to close Thursday at $38.94.