Navistar losses shrink as it tries to spin off RV business
Posted: 03/07/2013 at 10:50 am
By: Associated Press
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Diane McNulty and Steve Dreisbach of Monaco RV, produced by a subsidiary of Navistar, practice their putting next to the “Diplomat.” (Truth Photo By Tom Fougerousse)
The interior of Monaco RV’s “Diplomat,” which is produced by a subsidiary of Navistar. (Truth Photo By Tom Fougerousse)
The Lisle, Ill., company also on Thursday posted a loss for its November-January quarter as revenue fell 12 percent. Demand fell across the industry and Navistar also lost market share because of its transition to a new kind of emissions technology. But the interim CEO, Lewis Campbell, sounded an optimistic note Thursday. He said the company is starting on the road back to profitability and new engine programs are progressing on schedule. He predicted that Navistar will begin to pick up market share in the second half of the year as it launches the new engine models.
Navistar is also working to sell its Elkhart County-based Navistar RV unit, the former Monaco Coach. It pulled all RV earnings out of its quarterly report, treating the business as “discontinued” as it seeks to sell Navistar RV, a decision made during the company’s first quarter of 2013.
In the quarterly report, Navistar noted, “We continue to evaluate options to improve the efficiency and performance of our operations. Our focus is on improving our core North American Truck, Engine and Parts performance. We are evaluating opportunities to restructure our business and rationalize our manufacturing operations in an effort to optimize our cost structure, which could include, among other actions, additional rationalization of our manufacturing operations and/or divesting of non-core businesses.”
Shares of Navistar International Corp. shot up 20 percent, or $4.92, to $29.88 in morning trading.
As sales slumped last year, Navistar launched a cost-cutting drive and said it would explore putting some of its businesses up for sale. It also averted off a proxy war with activist investors, including Carl Icahn, by adding board members aligned with them.
In the latest management twist, Clarke, 57, will take over on April 15 from Campbell, 66, who is also executive chairman. Campbell, the temporary CEO since August 2012, will also be leaving the board while Clarke joins it. James Keyes, a board member since 2002, will become non-executive chairman.
Amid Navistar’s difficulties, the stock had dropped 38 percent over the past 12 months. Navistar posted a $3 billion loss last year as its revenue dropped 7 percent to $12.95 billion.
Losses continued into the company’s fiscal first quarter. On Thursday, Navistar said it posted a loss of $123 million, or $1.53 per share, compared with a loss of $153 million, or $2.19 per share, in the same period the year before.
Excluding discontinued operations, the loss came to $1.42 per share. Revenue totaled $2.64 billion, down from $3 billion. Analysts, on average, expected a loss of $1.74 per share on $2.76 billion in revenue, according to FactSet.
The company reduced general and sales expenses, helping offset a decline in volumes.
Clarke, the new CEO, joined Navistar in 2010 after a 35-year career at General Motors. He had run Navistar’s Asia operations before becoming president and COO. The incoming chairman, Keyes, 72, retired as battery and auto parts maker Johnson Controls Inc.’s chairman in 2003 after serving as that company’s CEO from 1988 to 2002.
Campbell, who is leaving, retired as aircraft and defense supplier Textron’s CEO in 2009 and as its non-executive chairman eight months later.
Elkhkart Truth reporter Justin Leighty contributed to this story.