This is a change from a net income of $102 million reported by the company during its fourth quarter of 2019 and a net income of $221 million reported for that year. Revenues for 2019 were also higher and reported to be $2.8 billion for the fourth quarter and $11.25 billion for that entire fiscal year.
Results during the fourth quarter of this year were impacted by several items including a $289 million accrual related to a profit sharing dispute, a $58 million settlement with the Department of Justice related to Navistar Defense and a $14 million charge related to pre-existing warranties, according to a news release from the company.
Decreases in revenues were also primarily driven by the impact that the coronavirus pandemic has had on the trucking industry, which lead to supply shortages earlier in the year, according to a news release from Navistar.
“While our results were affected by the pandemic and the impact of certain legal matters, we have experienced consistent sequential improvement in our business since April, which reflects broader improvement in the economy and trucking industry as well as our business performance from the implementation of our Navistar 4.0 strategy,” said Persio Lisboa, Navistar’s chief executive officer.
“I believe that the actions and investments we have made in the business during 2020 position us to emerge from the pandemic a much stronger company,” he added.
Navistar also announced during its fourth quarter a planned merger with Volkswagen’s truck unit Traton SE. That transaction is expected to close by the middle of 2021 and Traton is expected to purchase the remaining shares of Navistar for $3.7 billion.
Representatives of Navistar said in a news release that the merger will accelerate Navistar’s growth, providing it with access to new technologies, products and services while taking advantage of Traton’s global scale.
Navistar employs more than 1,000 people in Clark County and has a manufacturing facility in Springfield, which builds medium-duty trucks as well as cutaway vans for General Motors.
As a result of the global health crisis and its immediate impact on the economy, production was suspended at the Springfield plant in March due to disruptions in the supply chain.
However, production resumed on the plant’s main line, which builds primarily medium-duty trucks, in May and on the other line, which builds the cutaway vans, in June.
Overall, charge outs for medium and heavy duty trucks as well as buses in the United States and Canada were down for Navistar in both its fourth quarter and for the entire fiscal year.
Charge outs are defined as trucks that have been invoiced to customers. Navistar reported 13,200 charge outs compared to the 20,200 reported during the same quarter in 2019.
For the entire fiscal year of 2020, that number was 50,400, down from the 87,200 reported during the prior fiscal year. The decrease was also attributed to the impact of the coronavirus pandemic.
However, adjusted net income for the fourth quarter was $61 million versus the $114 million reported during the same quarter last year. Adjusted net income for fiscal year 2020 was $10 million versus $423 million in 2019.
Navistar finished the fourth quarter of 2020 with $1.8 billion in consolidated cash and cash equivalents.
By the numbers:
$236 million - Net loss reported during Navistar’s fourth quarter of 2020
$347 million - Net loss reported during Navistar’s 2020 fiscal year
$2.1 billion - Revenue reported by the company during the fourth quarter, which ended in October
$7.5 billion - Revenue reported by the company for the 2020 fiscal year