Navistar announced Wednesday, Dec. 19, a net loss of $2.8 billion in the fourth quarter of 2012, stemming mostly from a non-cash tax expense of $2 billion from an increase in deferred tax valuation allowance on the company’s U.S. deferred tax assets.
The fourth quarter loss also includes pre-tax charges of $149 million in warranty claims related primarily to its 2010 engines, $73 million for cost reduction actions, $16 million in charges for the restructuring of its manufacturing operations and $14 million in non-conformance penalties for not meeting Environmental Protection Agency emissions standards on certain MaxxForce engines.
Navistar reported a pre-tax loss of $556 million in the quarter with overall revenues of $3.3 billion. The loss, Navistar says, is a reflection of lower sales and adjustments to pre-existing warranties and charges related to cost-reduction efforts.
In the same quarter in 2011, Navistar reported net income of $255 million and $275 million pre-tax profit.
For the entire fiscal year, Navistar’s reporting a $3 billion net loss. The company reported $1.7 billion net income in the 2011 fiscal year.
In the fourth quarter of the 2012 fiscal year, Navistar’s truck segment recorded a loss of $160 million. The segment reported a profit of $287 million in the fourth quarter of 2011. For the year, the segment recorded a loss of $320 million, compared to 2011’s profit of $336 million. The segment’s 2012 loss was driven primarily by military sales and product mix, higher commodity costs and warranty expenses for 2010 engines, Navistar says.
The company’s engine segment recorded a loss of $287 million the quarter and a $562 million loss for the year. 2011’s fourth quarter saw a profit of $58 million for the engine segment and an $84 million profit for the year.