Navistar Posts $35 Million Loss
Friday, February 16th 2001, 12:00 am
By: News On 6
CHICAGO (AP) â€” Truck and diesel-engine maker Navistar International Corp., hit by an industrywide drop in demand for new trucks, said Friday it lost $35 million in its most recent quarter.
The Chicago-based company, the nation's third-largest truck manufacturer after Freightliner Inc. and Paccar Inc., said it will maintain reduced production until dealer inventories drop to reflect the weaker demand.
Sales for the quarter dropped by 30 percent, to $1.52 billion from $2.17 billion.
For the first quarter of its fiscal year, ended Jan. 31, Navistar's $35 million loss was 58 cents per share, compared with a profit of $70 million, or $1.10 a share, a year earlier.
That was slightly better than Wall Street's low expectations. Analysts surveyed by the market research firm First Call/Thomson Financial had estimated the loss would be 61 cents a share.
Navistar stock was up 44 cents to $26.03 a share in midday trading Friday on the New York Stock Exchange.
Hit hard by slowed truck demand, Navistar last year announced a restructuring and the planned elimination of 3,100 jobs. Profits for the August-through-October quarter were down 36 percent from the previous year.
``While we have made fundamental changes in the way we do business and we look for further productivity improvements in our core businesses, first-quarter results were influenced by challenges that are beyond the industry,'' said John Horne, Navistar's chairman, president and chief executive officer.
``Extremely low used truck values, record high diesel fuel prices and high interest rates caused many truck buyers to defer purchases.''
Navistar is counting heavily on a new line of medium trucks that it calls its biggest product introduction in a quarter-century to help pull it out of the slump. It also is rolling out new diesel engines and a new school bus in 2001.
Earlier this week, Navistar and Ford Motor Co. announced they are teaming up to build medium-duty trucks with a common chassis developed recently by Navistar. The joint venture is to begin operation at Navistar's plant in northern Mexico in about two years.
A Navistar engine plant in Melrose Park, Ill., was the site of a deadly rampage on Feb. 5 when fired employee William D. Baker shot four people to death, wounded four others and then fatally shot himself. He was to have begun a prison term the following day for helping to steal engines and parts.
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