Navistar trims Q4, 2016 year-end losses

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Updated Dec 21, 2016
International’s LT Series (right) drew some efficiency inspiration from the company’s SuperTruck project, pictured left.International’s LT Series (right) drew some efficiency inspiration from the company’s SuperTruck project, pictured left.

Navistar International Corporation today announced a fourth quarter 2016 net loss of $34 million, narrowing a Q4 2015 net loss of $50 million.

Revenues in the quarter were $2.1 billion – a 17 percent decline compared to the fourth quarter 2015– the company says was largely driven by an 18 percent decline in class 6-8 truck charge-outs, to 13,000 units.

“We recorded our fourth consecutive year of adjusted EBITDA improvement and significantly improved our adjusted EBITDA margin year on year,” says Troy A. Clarke, Navistar president and chief executive officer, “despite a substantial decline in revenues primarily due to the challenging conditions in the Class 8 market.”

During the fourth quarter, the company launched the International LT Series, its new flagship line of Class 8 over-the-road trucks, and also announced plans for a wide-ranging strategic alliance with Volkswagen Truck & Bus, which includes an equity investment in Navistar, strategic technology and supply collaboration and a procurement joint venture.

For the full-year 2016 Navistar reported a net loss of $97 million versus a net loss of $184 million last fiscal year. Revenue for the fiscal year 2016 was $8.1 billion, compared to $10.1 billion in fiscal year 2015.

For the fourth quarter 2016, Navistar’s truck segment recorded a loss of $61 million, up from a $36 million loss pasted the same period last year. Fourth quarter marketshare in Class 8 over-the-road trucks jumped 2 points – to 13 percent – versus the end of last fiscal year.

The year-over-year change was primarily due to increased used truck losses and a mix shift to units with lower margins in core markets, Clarke says.

For the 2016 fiscal year, the truck segment recorded a loss of $189 million, compared with a fiscal year 2015 loss of $141 million. The increase in segment loss was primarily driven by higher adjustments to pre-existing warranties of $70 million, increased used truck losses, lower Mexico margins due to the strengthening of the U.S. dollar, and lower export volumes, the company says.

Parts segment in the fourth quarter recorded profits of $162 million, similar to the year-ago fourth quarter. For the 2016 fiscal year, the parts segment recorded record profits of $640 million, up from $592 million posted last year.