Navistar 2013 divestiture of India JV impacts fiscal’s financials

Navistar International Corporation has announced 2013 Q4 net loss of $154 million, as compared to 2012 Q4 net loss of $2.8 billion. The company achieved its 4th quarter cash guidance, finishing the quarter with about $1.52 billion in manufacturing cash and marketable securities including net proceeds of $196 million from the issuance of new senior subordinated convertible notes, and an intercompany loan of $270 million in the quarter.

For 2014, Navistar forecasts a Class 8 industry of 220,000 to 230,000 retail sales in U.S. and Canada.

Navistar

“Operationally, we hit our plan this quarter, and we ended the year with an order backlog that is up 26 percent compared to this time last year. Those are just two examples of the continued progress we are making on our Drive to Deliver turnaround plan,” said Troy A. Clarke, Navistar’s president and chief executive officer. “During the quarter, we strengthened our cash position, continued to reduce structural costs, completed our on-highway Class 8 transition to SCR emissions technology, and progressed with our medium-duty product transition launches, resulting in 500 medium duty SCR trucks and buses built this month, as planned.

“Clearly, we are disappointed that our previous engine strategy continues to negatively impact us in the form of additional warranty expense, but we will continue to stand behind our products and manage this issue as these engines work their way through the standard and extended warranty cycles,” Clarke said. “We’re not letting it overshadow the strong progress we’ve made to fundamentally change Navistar’s operations and culture in 2013. We still have a lot of hard work ahead of us, but we are pleased to be entering 2014 in a much stronger position than we were one year ago.”

“Traditionally, our first quarter represents the low period of the year as volumes are lower due to the Thanksgiving and winter break downtimes, which is compounded this year by significantly lower military sales and the late-in-the-quarter ramp up of our Cummins ISB engine offering in our medium-duty trucks and buses,” Clarke said. “However, we anticipate stronger year-over-year performance starting in the second quarter, driven by higher volumes in truck, parts and our global operations and slightly improved pricing, coupled with ongoing structural and material cost improvements.”