Navistar raised its revenue expectations for the year due to high demand in the heavy truck market, and the company reported net income of $55 million in the second quarter this year.
Company officials said this week they expect revenues for the year between $9.75 and $10.25 billion, up from previous projections of $9.25 billion and $9.75 billion. The company, whose headquarters is in Illinois, reported a net loss of $80 million during the second quarter last year.
Navistar is one of Clark County’s largest employers with more than 1,800 people employed at its Springfield plant. Thousands of the company’s retirees also live in the area.
“The second half of 2018 looks promising with a strong industry, new product deliveries and improving results,” said Troy Clarke, Navistar’s chairman, president and CEO in a conference call with investors.
Company officials have previously said they expect strong demand across the industry for trucks this year as the economy remains strong and companies but new trucks to replace older models. Clarke said Navistar expects sales of medium and heavy-duty trucks and buses in the U.S. and Canada of 380,000 to 410,000 vehicles.
That’s up from the company’s previous expectation of 360,000 to 390,000 vehicles.
The company does still see some challenges in the second half of the year, said Walter Borst, executive vice president and Navistar’s chief financial officer.
“While we expect to drive additional product cost improvements from our line’s activities we expect to be impacted by higher commodity prices and freight costs as well,” he told analysts after this week’s earnings report.
Company officials reported Navistar’s truck segment made profits of $42 million for the quarter, compared to a loss of $56 million during the same period last year. Company officials said the improvement was driven by the impact of higher sales in the company’s key markets and a decline in used truck losses.
Workers at Navistar’s Springfield facility produce medium, severe service and heavy duty commercial trucks, and the GM cutaway van on a separate line. The facility is also launching a new joint venture truck with GM this year.
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The company’s Global Operations and Financial segments also reported improvements compared to last year. Global Operations reported $1 million in profit in the second quarter this year compared to the same time in 2017, primarily due to higher engine sales in South America in an improving Brazilian economy.
The Parts segment recorded a quarterly profit of $132 million in second quarter 2018, down 14 percent versus the same period one year ago, primarily due to lower U.S. margins, higher freight-related expenses and intercompany access fees according to information from the company.