Demand from trucking companies for new vehicles led Navistar to a solid third quarter and company officials said Thursday they expect strong financial results to continue into next year.
Navistar reported net income of $170 million for the third quarter this year, compared to $37 million during the same period in 2017. The Illinois-based company also raised its revenue projections for the year to between $10.1 billion and $10.4 billion. Earlier projections were from $9.75 billion to $10.25 billion.
“We think the market will remain strong in the fourth quarter and into 2019,” said Troy Clarke, Navistar’s president and CEO in a conference call with investors Thursday morning.
Navistar’s truck segment recorded a record profit of $165 million compared to $7 million for the same time a year ago, company officials reported. The company projects retail deliveries of trucks and buses to be between 390,000 and 410,000 units this year.
The company is also forecasting retail deliveries of 385,000 to 415,000 units in fiscal year 2019.
The News-Sun reported earlier this year the industry is seeing near-record demand for heavy trucks, boosting revenue both for manufacturers like Navistar and their suppliers. Rising freight rates mean trucking firms are likely seeing solid profits, boosting confidence and encouraging fleets to replace their aging trucks.
“We had a strong quarter that took full advantage of healthy industry volumes and the market’s enthusiasm for our new products,” Clarke said.
Workers at Navistar’s Springfield facility produce medium, severe service and heavy duty commercial trucks, as well as the GM cutaway van on a separate line. The facility is also launching a new joint venture truck with GM this year. Navistar is one of Clark County’s largest employers with more than 1,800 people working at its Springfield plant. Thousands of the company’s retirees also live in the area.
Chris Blizard, president of the UAW Local 402, could not be reached for comment Thursday. The union represents the majority of Navistar’s workforce.
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The heavy demand has produced a backlog of orders stretching into next year, but Clarke told investors on Thursday that he does not expect a significant number of canceled orders before Navistar can build the new vehicles.
“We expect to build the units in our backlog,” Clarke said.
Navistar said the quarter included several highlights, including gaining market share in the heavy truck industry.
The company has rebounded over the past several years after weathering turmoil that included top management changes, legal struggles, a recession and a failed engine technology. The company reported an annual profit of $30 million in 2017, its first annual profit in six years.
“Our team has delivered substantial accomplishments this year, including growing Class 8 share, building our backlog and effectively managing costs,” Clarke said. “Our progress positions us well for a very strong fourth quarter and another good year in 2019.”