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Navistar (NAV) Posts Loss in Q1, Revenues Miss Estimates
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Navistar International Corporation reported first-quarter fiscal 2017 (ended Jan 31, 2017) loss from continuing operations of 76 cents per share, as compared with a loss of 40 cents posted in the year-ago quarter. The reported loss was wider than the Zacks Consensus Estimate of a loss of 51 cents. Navistar recorded a net loss from continuing operations of $62 million, wider than a loss of $33 million recorded in the prior-year quarter.
Navistar’s revenues fell 6% year over year to $1.66 billion in the quarter, missing the Zacks Consensus Estimate of $1.75 billion. The decline resulted from lower truck volumes owing to sluggish Class 8 heavy industry conditions and reduced global sales.
Segment Details
Revenues at Navistar’s Truck segment decreased 9% year over year to $1.03 billion, primarily because of lower Core truck volumes due to sluggish industry conditions. The segment recorded a loss from continuing operations of $69 million, considerably wider than a loss of $51 million in the prior-year quarter. The wider loss was due to market pressure, adverse impact of lower Core market volumes and a decrease in other income, partly offset by narrower used truck losses, improved material costs and lower adjustments to pre-existing warranties.
Revenues at Navistar’s Parts segment were $570 million, on par with the year-ago level. Revenues benefitted from higher U.S. and Canada parts sales, offset by lower export and Mexico volumes. The segment registered profits of $149 million, lower than $150 million recorded in the year-ago quarter.
Revenues at Navistar’s Global Operations segment plunged 46% to $50 million due to lower volumes in its South America engine operations, partly offset by positive currency exchange rate impact. Engine volumes declined 69% year over year due to a customer contract ending in the second quarter of 2016 and economic recession in Brazil. The segment recorded a loss of $4 million in the quarter, compared with a loss of $13 million a year ago.
Revenues at Navistar’s Financial Services segment declined 8% to $54 million in the reported quarter. The segment registered profits of $13 million, down from $26 million in the first quarter of fiscal 2016. The year-over-year decrease in profits can be attributed to lower interest margins, decline in other revenues and reduced interest income.
Navistar International Corporation Price, Consensus and EPS Surprise
Navistar had cash and cash equivalents of $573 million as of Jan 31, 2017, down from $804 million as of Oct 31, 2016. As of Jan 31, 2017, notes payable and long-term debt was $4.9 billion, relatively in line with Oct 31, 2016 level.
Net cash flow from operations totaled $22 million in the first quarter of fiscal 2017 versus cash outflow of $102 million in the year-ago quarter. Capital expenditure totaled $46 million, up from $29 million recorded in the year-ago period.
Guidance
Navistar projects Class 6–8 retail deliveries in the U.S. and Canada in the range of 305,000–335,000 units for fiscal 2017.
Revenues for fiscal 2017 are expected to be similar to fiscal 2016 level. Adjusted EBITDA is anticipated to be higher than last year. Manufacturing cash at the end of fiscal 2017, including capital injection from Volkswagen Truck & Bus, is projected at around $1 billion.
Price Performance
Over the past one year, Navistar’s shares gained 127.5% while the Zacks categorized Auto/Truck Original Equipment industry saw a 23.1% increase. The stock’s rally was driven by benefits from the alliance with Volkswagen, product launches, cost-saving initiatives and increased production at plants. Zacks Rank & Key Picks
Navistar currently carries a Zacks Rank #3 (Hold).
For the current year, Lear Corporation, American Axle and General Motors expect earnings growth of around 8.9%, 8.1% and 9.4%, respectively.
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Navistar (NAV) Posts Loss in Q1, Revenues Miss Estimates
Navistar International Corporation reported first-quarter fiscal 2017 (ended Jan 31, 2017) loss from continuing operations of 76 cents per share, as compared with a loss of 40 cents posted in the year-ago quarter. The reported loss was wider than the Zacks Consensus Estimate of a loss of 51 cents. Navistar recorded a net loss from continuing operations of $62 million, wider than a loss of $33 million recorded in the prior-year quarter.
Navistar’s revenues fell 6% year over year to $1.66 billion in the quarter, missing the Zacks Consensus Estimate of $1.75 billion. The decline resulted from lower truck volumes owing to sluggish Class 8 heavy industry conditions and reduced global sales.
Segment Details
Revenues at Navistar’s Truck segment decreased 9% year over year to $1.03 billion, primarily because of lower Core truck volumes due to sluggish industry conditions. The segment recorded a loss from continuing operations of $69 million, considerably wider than a loss of $51 million in the prior-year quarter. The wider loss was due to market pressure, adverse impact of lower Core market volumes and a decrease in other income, partly offset by narrower used truck losses, improved material costs and lower adjustments to pre-existing warranties.
Revenues at Navistar’s Parts segment were $570 million, on par with the year-ago level. Revenues benefitted from higher U.S. and Canada parts sales, offset by lower export and Mexico volumes. The segment registered profits of $149 million, lower than $150 million recorded in the year-ago quarter.
Revenues at Navistar’s Global Operations segment plunged 46% to $50 million due to lower volumes in its South America engine operations, partly offset by positive currency exchange rate impact. Engine volumes declined 69% year over year due to a customer contract ending in the second quarter of 2016 and economic recession in Brazil. The segment recorded a loss of $4 million in the quarter, compared with a loss of $13 million a year ago.
Revenues at Navistar’s Financial Services segment declined 8% to $54 million in the reported quarter. The segment registered profits of $13 million, down from $26 million in the first quarter of fiscal 2016. The year-over-year decrease in profits can be attributed to lower interest margins, decline in other revenues and reduced interest income.
Navistar International Corporation Price, Consensus and EPS Surprise
Navistar International Corporation Price, Consensus and EPS Surprise | Navistar International Corporation Quote
Financial Position
Navistar had cash and cash equivalents of $573 million as of Jan 31, 2017, down from $804 million as of Oct 31, 2016. As of Jan 31, 2017, notes payable and long-term debt was $4.9 billion, relatively in line with Oct 31, 2016 level.
Net cash flow from operations totaled $22 million in the first quarter of fiscal 2017 versus cash outflow of $102 million in the year-ago quarter. Capital expenditure totaled $46 million, up from $29 million recorded in the year-ago period.
Guidance
Navistar projects Class 6–8 retail deliveries in the U.S. and Canada in the range of 305,000–335,000 units for fiscal 2017.
Revenues for fiscal 2017 are expected to be similar to fiscal 2016 level. Adjusted EBITDA is anticipated to be higher than last year. Manufacturing cash at the end of fiscal 2017, including capital injection from Volkswagen Truck & Bus, is projected at around $1 billion.
Price Performance
Over the past one year, Navistar’s shares gained 127.5% while the Zacks categorized Auto/Truck Original Equipment industry saw a 23.1% increase. The stock’s rally was driven by benefits from the alliance with Volkswagen, product launches, cost-saving initiatives and increased production at plants.
Zacks Rank & Key Picks
Navistar currently carries a Zacks Rank #3 (Hold).
Better-ranked companies in the auto space include Lear Corporation (LEA - Free Report) , American Axle & Manufacturing Holdings, Inc. (AXL - Free Report) and General Motors Company (GM - Free Report) . All the stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here..
For the current year, Lear Corporation, American Axle and General Motors expect earnings growth of around 8.9%, 8.1% and 9.4%, respectively.
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Just released: Driverless Cars: Your Roadmap to Mega-Profits Today. In this latest Special Report, Zacks’ Aggressive Growth Strategist Brian Bolan explores a full-blown technological breakthrough in the making – autonomous cars. He also spotlights 8 stocks with tremendous gain potential to feed off this phenomenon. Click to see the stocks right now >>