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Navistar (NAV) Slips To 4Q Loss, Truck And Engine Segments Post Losses

 December 19, 2012 08:23 AM

(By Balaseshan) Truck maker Navistar International Corp. (NYSE: NAV) slipped to a huge quarterly loss due to lower sales, higher costs and expenses, as well as a hefty income tax expense.

The Lisle, Illinois-based company's revenue fell 24 percent to $3.3 billion in the fourth quarter due to a decline in sales across its segments. However, top-line came in better than market expectations.

The company posted loss of $2.77 billion or $40.13 per share for the fourth quarter, compared with a profit of $255 million or $3.48 per share in the comparable period of last year.

Current quarter results included increased non-cash tax expense of $2 billion or $28.59 per share for the increase in deferred tax valuation allowance on U.S. deferred tax assets.

[Related -Navistar International Corp (NYSE:NAV): Set To Benefit From Improving North American Truck Cycle]

The results also included pre-tax charges of $149 million in additional pre-existing warranty expenses primarily related to EPA 2010 big bore engines, $73 million for cost reduction actions, $16 million in charges for the restructuring of North American manufacturing operations and engineering integration and $14 million in non-conformance penalties (NCPs).

Wall Street analysts, on average, expected a loss of $1.12 per share on revenue of $3.18 billion.

The company recorded a pre-tax loss of $566 million for the fourth quarter, compared to a profit of $275 million in the previous year quarter.

[Related -Stocks Tumble After BOJ Policy Decision; Navistar International Corp (NAV) Drops]

Navistar's truck segment posted a loss of $160 million on decreased military sales and product mix, higher commodity costs and warranty expense related to extended warranty contracts on 2010 emission engines.

The company's engine segment also recorded a loss of $287 million due to increased warranty expense for 2010 emission engines and lower sales at our South American operations.

The stock, which has been trading in the 52-week range of $18.17 to $48.18, closed up 4.24% at $22.85 on Wednesday.

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