Navistar reports $37M profit after stronger truck sales


Navistar reported a net profit of $37 million for its third quarter, a turnaround from the same time last year which company leaders attributed in part to stronger truck sales and more efficient manufacturing processes.

It’s too early to say if the company’s improving finances will continue into the next few quarters, said Stephen Volkmann, an analyst from Jefferies Equity Research, which follows Navistar. But it’s one sign that the manufacturer’s efforts to cut costs and improve its reputation with customers is beginning to pay off.

READ MORE: Navistar, local leaders push others to buy trucks made in Springfield

The company’s Springfield plant is one of the largest employers in Clark County, where it employs more than 1,500 workers. Thousands of retirees also remain in the area.

“We don’t really know,” Volkmann said about the truckmaker’s future profitability. “But it’s a very encouraging sign. They’ve been working toward this a long time so it didn’t just come out of the blue. It’s been slow and incremental progress over the past two or three years.”

DETAILS: Navistar, major Springfield employer, reports $62M loss

Truck sales increased about 10 percent compared to the same quarter last year, due to more sales in the U.S. and Canada and ramped up production of a cutaway model of GM’s G Van this year, company officials said. Workers in Springfield’s manufacturing facility began production of that vehicle this year.

Navistar’s revenues were up about 6 percent compared to the same quarter last year, primarily due to an increase in truck sales, according to information from the company.

MORE: Navistar closes deal for VW to buy 17 percent stake in truckmaker

Navistar and GM also previously made a separate joint agreement to build medium-duty trucks in Springfield. Those trucks will be available in both the International and GM brands, and will be produced with engineering input from both companies, Barlow said. Production on that vehicle is expected to start next year.

During the third quarter in 2016, Navistar recorded a net loss of $34 million.

The company took several actions this quarter that will improve the company’s bottom line moving forward, said Troy Clarke, president and CEO of Navistar in a conference call with investors. Navistar is closing its engine production operations at its Melrose Park Facility in Illinois by the second quarter next year, a move that will result in laying off 170 employees.

RELATED: $12M Navistar project could retain 114, add 40 new jobs in Urbana

But company officials have said the engines produced at that site was a niche product, and the move will cut operating costs by about $12 million per year. Navistar also sold two businesses unrelated to truck production, including a parts fabrication plant in Arkansas and the remainder of Navistar’s fuel injector business.

Clarke also said he expects a solid fourth quarter on the horizon.

“It’s a prime selling season right now,” Clarke said. “I like our position. It feels good to be in on more deals this year than we were this time last and although the market remains competitive, we believe our investments in new trucks, buses and engines puts us in the best position that I’ve seen during my years at the company.”

The fourth quarter is traditionally strong for the company, but it’s too early to say whether that will continue into next year.

“It’s a milestone I’m sure they’re very happy they’ve reached,” Volkmann said of the recent profits. “It’s the result of a lot of hard work over an extended period and it’s encouraging that we’re seeing those results.”



Reader Comments


Next Up in Business

CareSource gets latest report card from state
CareSource gets latest report card from state

CareSource’s performance rating slipped in some categories on its latest report card from Ohio Medicaid, though retained high marks for its efforts to keep children healthy. The nonprofit insurer, headquartered in downtown Dayton, overall received 14 out of 25 stars, ranking 3rd out of the five insurers that privately manage Medicaid plans in...
Trump nominates new commander of Air Force Materiel Command
Trump nominates new commander of Air Force Materiel Command

President Donald Trump has nominated Lt. Gen. Arnold Bunch Jr. to become commander of the Air Force Materiel Command at Wright-Patterson Air Force Base. Bunch currently serves as military deputy at the Office of the Assistant Secretary of the Air Force for Acquisition at the Pentagon. The nomination must be confirmed by the Senate. If confirmed, Bunch...
Dayton VA director says hospital to focus on new jobs, programs in 2019
Dayton VA director says hospital to focus on new jobs, programs in 2019

Dayton VA Medical Center Director Jill Dietrich told the Dayton Daily News that she’s focused on growing new programs, adding jobs and “continuing to provide excellent care” in 2019. Dietrich, who manages 2,300 employees and a $435 million budget, has oversight of the sprawling hospital campus in Dayton and four clinics in in Richmond...
Honda applies to build $36.5 million expansion
Honda applies to build $36.5 million expansion

Honda appears to be gearing up for a big expansion at its Anna engine plant. The automaker has recently applied to Shelby County for a new building construction permit valued at $33 million. The Honda of America and Devon Industrial Group application — filed near the end of November — seeks permission to build a 119,063-square-foot building...
Employers say they’re poised to hire in 2019
Employers say they’re poised to hire in 2019

Employers in the Dayton area will hire at a “respectable” pace in the first quarter of the new year, according to Manpower’s newest survey of area employers. Nearly a quarter — 24 percent — of surveyed employers plan to hire new employees from January to March next year, the survey found. This number is offset by the four...
More Stories