Hampered by warranty costs, Navistar posts $154M loss in Q4
For the fourth quarter 2013, the North American parts segment recorded a profit of $147 million, compared with fourth quarter profit of $103 million last year, driven primarily by strong margins and structural cost reductions, the company says.
These same factors were the primary drivers of the segment’s 31-percent improvement in full-year performance, as the North America parts segment posted a profit of $476 million in fiscal year 2013, compared to the prior year profit of $343 million, Clarke adds.
Navistar closed out the year on several strong notes. The company’s Class 6-8 truck orders were up 12 percent in the fourth quarter versus the third and climbed 34 percent from the final quarter of 2012. Class 8 retail market share hit 16 percent this past quarter, the highest it has been all year. Fourth quarter Class 6-7 retail market share reached 20 percent with order intake at 27 percent, another high for the year.
Allen says the company has also received more than 16,000 orders for the 15-liter ISX since its launch in September of last year and that the company’s 13 liter with SCR has been well received, logging more than 7,500 orders since its launch in March.
Navistar forecasted Friday Class 8 industry-wide retail sales of 220,000 to 230,000 in the U.S. and Canada for its fiscal year 2014, and expects to generate an additional $175 million in structural cost savings in fiscal year 2014, and projects its capital expenditures will be similar to 2013 spending.
“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 says. “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.”