Navistar International Corporation (NAV - Free Report) recently announced its plans to invest $125 million in new manufacturing facilities at its Huntsville, AL engine plant over the next three years.
Navistar manufactures International brand diesel engines for trucks and buses in the Huntsville plant. The primary engine manufactured in the plant is the International A26, a 12.4-liter big-bore engine used in Class 8 on-highway trucks, as well as some vocational trucks.
Notably, this investment will likely create 145 additional jobs in the company's Huntsville facility.
The investment aids the company’s plans to manufacture next-generation big-bore powertrains developed with its global alliance partner — Traton — a subsidiary of Volkswagen. Through the Traton subsidiary, Volkswagen owns around 17% of Navistar.
Coming to the price performance, over the past three months, shares of Navistar have gained 3.8%, outperforming the industry’s growth of 2.2%.
Early this month, Navistar reported second-quarter fiscal 2019 earnings. The company’s adjusted earnings per share and revenues surpassed the respective Zacks Consensus Estimate. Improved market share, and robust sales of Class 6-8 trucks and buses in the United States and Canada are key driving factors for the company.
Strong product backlogs have encouraged Navistar to raise its guidance for fiscal 2019. For the current quarter, the company expects revenues of $11.25-$11.75 billion compared with the previous projection of $10.75-$11.25 billion. Further, adjusted EBITDA is predicted to be $875-$925 million — marking an increase from the $850-$900 million guided earlier.
Apart from backlogs, the company has been benefiting from an upgraded product line, rolled out over the past few years. Its range of heavy-to-medium, and vocational trucks and buses with alternative powertrains have aided in improving its market share. Also, product launches are well received by customers, further boosting market share. Moreover, with intense competition among peers, an improving market share will be conducive to Navistar’s top-line growth.
Navistar International Corporation Price and Consensus