June 10, 2013
Navistar International Corporation announced Monday a second quarter net loss of $374 million, more than double the $172 million loss posted a year ago.
Among the bright spots was a profit of $91 million from the company’s parts segment, compared to $41 million in the second quarter of last year.
“We are not satisfied with our overall financial results this quarter, but we are pleased with the continued progress we made in a number of areas on our turnaround plan,” Troy A. Clarke, Navistar president and chief executive officer, says. “We still face some significant, yet solvable challenges, primarily in the areas of higher pre-existing warranty costs for our earlier EPA 2010 emissions level engines, as well as in rebuilding sales and restoring market share. However, we are already implementing the right leadership and business process changes to effectively address these priority issues.”
The increase in parts revenue, Navistar says, was primarily driven by margin improvements. The segment also realized $11 million in lower SG&A expenses reflecting the impact of 2012 cost-reduction initiatives.
The engine segment recorded a loss of $138 million, compared with a year-ago second quarter loss of $108 million and recorded $107 million in charges for adjustments to pre-existing warranties and $12 million in non-conformance penalties.