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Navistar's Earnings Ahead Of Estimates, Raises Guidance

Navistar's Earnings Ahead Of Estimates, Raises Guidance

Navistar (NYSE: NAV), a medium- and heavy-duty truck manufacturer, reported fiscal second quarter 2019 adjusted earnings per share of $1.06 compared to NASDAQ's consensus estimate of $0.88 per share. Additionally, the company raised its earnings guidance for fiscal 2019.

Adjusted results exclude a few one-off expenses, most notably the company's $159 million class action settlement over its defective MaxxForce engines.

The Lisle, Illinois-based truck maker reported a 24-percent increase in revenue to $3 billion in the period. This was attributed to higher Class 6-8 trucks and bus sales in the United States and Canada. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) increased 23 percent to $224 million.

"In the second quarter, Navistar accelerated market share growth, demonstrating the success of our new product lineup. We grew revenue and adjusted EBITDA, stepped up our Uptime value proposition, and lowered our risk profile, enabling the company to focus intensely on the road ahead," said Navistar's Chairman, President and Chief Executive Officer Troy A. Clarke.

Clarke is referring to Navistar's new post-sales function, a new partnership with Love's Travel Stops that has created the largest commercial vehicle service network in North America and the establishment of a new parts distribution center in Memphis, Tennessee.

Management said that based on strong industry conditions, the company has raised its 2019 full-year industry and financial guidance. NAV now expects retail deliveries of Class 6-8 trucks and buses in the U.S. and Canada to be 425,000 to 445,000 units (Class 8 retail deliveries of 290,000 to 310,000). NAV is now forecasting its full-year revenue to be $11.25 billion to $11.75 billion (prior guidance was $10.75 billion to $11.25 billion) and adjusted EBITDA of $875 million to $925 million (up from $850 million to $900 million).

The press release said that the new guidance does not include the possible tariffs related to goods crossing the Mexican border.

"In the second half, we believe our growth in market share will translate to improved revenues and gross margins that will generate higher adjusted EBITDA margins than in the first half. Our marketplace progress, which has delivered our strongest backlog this decade, provides confidence that both 2019 and 2020 will be good years for Navistar," said Clarke.

The company will hold a call to discuss these results with analysts and the media at 9:00 a.m. EDT.

NAV Stock Price – SONAR

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