A look inside the Navistar International truck plant in Springfield.

Navistar sees strong third quarter, increase in truck volume

An increase in the volume of medium and heavy-duty trucks for Navistar led to $3 billion in revenues and a strong third quarter, company officials said.

Navistar reported a net income of $156 million during the quarter ending July 31. However, that is a decrease compared to the same period last year that saw a net income of $170 million for the company.

“We delivered another strong quarter. Total revenues grew 17 percent to over $3 billion,” said Troy Clarke, Navistar’s president and CEO in a conference call with investors Wednesday morning.

“The growth came from the truck segment were volumes rose 45 percent year over year. Retail market share continues to grow year over year as well,” he added.

The Illinois-based company expects to make between $11.25 billion and $11.75 billion in revenues by the end of the year, according to report released this week. The company projects retail deliveries of trucks and buses in the United States and Canada to be between 435,000 to 455,000 units this year.

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In addition, the company is also forecasting retail deliveries of 335,000 to 365,000 units, with heavy-duty trucks making up the majority of projected deliveries, for the next fiscal year.

“We think our position for next year will continue to improve even as industry volumes continue to decline,” Walter Borst, Navistar’s chief financial officer, said during the conference call.

The News-Sun reported earlier this year that the industry as a whole is building more commercial trucks than are being sold. The surplus in trucks, especially medium-duty ones, in the commercial sector, have caused companies, such as Navistar, to reduce line production speed at plants in the United States and Mexico.

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The number of net orders for medium-duty trucks as of June 2018, were 121,700 compared to 94,300 reported at the end of June this year, the News-Sun previously reported.

Clarke said industry orders for heavy duty-trucks have declined by 75 percent in the third quarter this year. He said build rates for new trucks have caused the company’s backlog of orders waiting to be built to decline by 44 percent since peaking last fall.

“Navistar’s backlogs are declining as well. And as you have seen, we are actively managing this by adjusting assembly line rates to create a balance between customer demand, inventory levels and a healthy backlog,” Clarke told investors.

That means reducing line rates at the company’s assembly plants in Springfield and in Escobedo, Mexico.

“Today (with) U.S. orders as well as lower Mexico and Latin America orders has resulted in the need to reduce assembly line rates in both of our truck plants. We make these type of decisions every day,” Clarke added.

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The company announced last month that it would be reducing production rates at its Springfield plant, which specializes in the production of medium-duty commercial trucks.

Chris Blizard, the president of UAW Local 402, declined to comment Thursday as Navistar has yet to finalize the changes being made at the plant. His union represents a large number of workers at the Springfield location.

It is unclear how many lines will be affected by the change or if it will affect staffing levels.

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