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Navistar (NAV) Q1 Earnings Surpass Estimates, Sales Lag

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Navistar International Corporation  reported first-quarter fiscal 2021 adjusted earnings of 5 cents per share, beating the Zacks Consensus Estimate of break-even profit and comparing favorably with the year-ago quarter’s loss of 33 cents. Higher-than-expected sales from global operations unit led to the outperformance. Notably, revenues from the segment totaled $95 million, outpacing the consensus mark of $68 million. However, the truck maker posted total revenues of $1,812 million for the December-end quarter, missing the Zacks Consensus Estimate of $1,991 million. Moreover, the top line also declined from the year-ago level of $1,838 million.

Segmental Performance

The Truck segment’s total net sales were $1,237 million for the reported quarter, compared with $1,242 million in the year-ago period. The segment incurred a net loss of $81 million, wider than $58 million reported in the year-ago quarter. This was due to lower volumes in core markets along with charges relating to warranties and sale of Melrose Park facility.

The Parts segment net sales fell 5.2% from the year-ago quarter to $467 million. The segment’s profit was $111 million, down 6.7% on a year-over-year basis. The segment’s results were impacted by lower volumes in the United States and Canada.

Net sales in the company’s Global Operations amounted to $95 million, up from $68 million recorded in the year-ago quarter. Higher engine volumes and parts sales in South African operations resulted in this upside. The segment reported a income of $6 million versus break-even profit in the corresponding period of 2020. 

Net sales in Navistar’s Financial Services segment totaled $51 million, down from $57 million reported in the first-quarter fiscal 2020 amid low interest rates. Consequently, the segment recorded a profit of $12 million compared with the year-ago quarter’s $17 million.

Financial Position

The Illinois-based trucking giant had cash and cash equivalents of $1,261 million as of Jan 31, 2021, lower than $1,843 million on Oct 31, 2020. At fiscal first quarter-end, long-term debt was $4,504 million, down from $4,690 million as of Oct 31, 2020.

Navistar currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the industry include Meritor , American Axle & Manufacturing (AXL - Free Report) and Magna International Inc. (MGA - Free Report) , each sporting Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

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