(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.
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.
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.