Navistar released its 2016 fourth quarter outcomes, reporting a net loss of 17 percent from this time last year on revenue of $2.1 billion.
According to Navistar, the $34-million decline in revenues from $50-million net loss fourth quarter 2015 was driven by an 18-percent drop in charge-outs of Class 6-8 trucks and buses.
The company added that this decline reflects a continued softening of Class 8 industry volumes in the U.S. and Canadian markets. Despite this decline, President and CEO Troy Clarke said in a statement that Navistar “demonstrated our ability to lower our break-even point and improve our operations.”
Clarke cited how Navistar recorded its fourth consecutive year of adjusted earnings before interest, tax, depreciation and amortization (EBITDA) improvement. The numbers for the fourth quarter 2016 EBITDA was $95 million versus $86 million for the same period a year ago.
During the fourth quarter, the company launched the International LT Series. Navistar has labelled the Class 8 over-the-road trucks its new flagship line.
The company also announced plans for a wide-ranging strategic alliance with Volkswagen Truck & Bus, which Clarke said Navistar is “excited by the opportunities it will provide.” The deal is expected to close by the end of March, with U.S. anti-trusts officials already signing off.
“The alliance announcement has been positively received by our customers, which when combined with our ongoing cadence of new product offerings, confirms our confidence in our improving standing in the market,” he added.
This collaboration with the German automotive company includes an equity investment in Navistar, strategic technology and supply collaboration and a procurement joint venture.
“Although we expect tough industry conditions to continue through the first half of 2017, we see further opportunities to continue to reduce our break-even point, including leveraging some early cost synergies from the Volkswagen Truck & Bus alliance,” Clarke said.
As for full-year 2016 results, Navistar saw some improvement as it continues its turnaround, reporting a net loss of $97 million as opposed net losses of $184 million last year.
Fiscal year 2016 adjusted EBITDA was $508 million compared to $494 million adjusted EBITDA for 2015. Full-year adjusted EBITDA margins increased 140 basis points to 6.3 percent.
Revenue for this year was $8.1 billion compared to $10.1 billion one year ago.
“We continued to invest and launch new products in 2016 and had our third consecutive year of record parts profits,” Clarke said. “We also saw solid truck and bus order share performance, which positions us for higher retail market share in the future.”