Navistar International Corporation, which has been hammered by softer industry conditions, announced a third quarter net loss of $34 million. This is the second straight year the company has announced net losses, the 2016 shortfalls up from last year’s report.
“This quarter’s results show that we continue to make progress in the face of tougher market conditions, particularly in the heavy segment,” Navistar President and CEO Troy Clarke said in a conference call detailing 2016 earnings results.
He added that the downturn can be attributed to the lower year-over-year charge outs in core markets, specifically Class 6-8 trucks and buses in the United States and Canada.
This slump was also reflected in returns for the quarter, the $2.1 billion in revenues the company announced down 18 percent from the same period one year ago. Similarly, Navistar’s net loss for last year was listed at $28 million.
The third quarter decline has also affected different sectors of the company, the truck segment seeing net sales drop 24 percent compared to 2015. This segment also recorded a loss of $54 million for 2016, a plunge from the year-ago third quarter loss of $36 million
Navistar credited these individual losses to lower core truck and export truck volumes, a shift in product mix in the company’s core market and lower used truck revenue.
“As we pursue our goal of market share growth…We are confident that as the industry works through its near term challenges, particularly in Class 8, our improvements in order share will translate to improved retail share as well,” Clarke said.
The president and CEO highlighted Navistar’s expansion of its medium-duty engine offerings to include the Cummins L9 engine for its IC Bus RE Series school bus and demonstrated a gasoline-powered CE School Bus, which it plans to add to its school bus portfolio.
Additionally, Clarke emphasized the wide-ranging strategic alliance Navistar formed with Volkswagen Truck & Bus.
“This partnership will do a number of positive things for us,” he said, adding that the deal should make Navistar “stronger and a more profitable company.”
The alliance includes an equity investment by the German company, along with framework agreements for strategic technology and supply collaboration and a procurement joint venture.
“We are making significant investments in new products, services and technologies and partnerships that set us apart,” Clarke said. “This company is well positioned—operationally and product and service wise—to capitalize as market conditions improve.”