Tags: navistar | stock | profit

Navistar Stock Up Despite Lower Adjusted Profit

Wednesday, 07 Sep 2011 05:16 PM

Shares of Navistar International Corp., the maker of International brand trucks, rose less than a percent after its third-quarter profit slid, excluding some items, as the results of its largest operating unit declined.

Navistar rose 32 cents to $39.12 at 4:03 p.m. in New York Stock Exchange composite trading.

The company reported a profit of $61 million, or 79 cents a share, excluding an income tax allowance of $1.48 billion. On that basis, the average estimate of analysts surveyed by Bloomberg was $1.26 a share. In the year-ago quarter, Navistar had a profit excluding items of $107 million, or $1.44 a share.

The share of truck sales to fleet buyers also has been increasing, which raises volume while cutting profit, Chief Executive Officer Dan Ustian said on a conference call. Prices of trucks sold to fleets may be as much 10 percent lower compared with a single truck sale at a dealership, he said.

Navistar, based in Warrenville, Illinois, reported a $75 million loss in its truck unit as more military truck orders were shifted to the quarter ending Oct. 31. The unit’s profitability will improve this quarter, Ustian said on the conference call.

A decline in “higher revenue” defense business and “higher costs associated with the supply chain” affected the truck unit’s results, David Leiker, an analyst at Robert W. Baird & Co. in Milwaukee, wrote in a research note.

The company’s third-quarter revenue rose 9.8 percent to $3.54 billion. Navistar’s net income rose to $1.4 billion, or $18.24 a share, from $117 million or $1.56 a share, a year ago.

Navistar also said Wednesday that it will buy back as much as $175 million of its shares and will use “excess cash reserves for the repurchase.” Navistar stock has dropped 32 percent this year.

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