Navistar International Corporation announced a first quarter 2021 net loss of $81 million, or $0.81 per diluted share, compared to first quarter 2020 net loss of $36 million, or $0.36 per diluted share. The loss in the first quarter of 2021, ended Jan. 31, 2021, included $86 million of tax-effected significant items.
First quarter 2021 adjusted net income was $5 million compared to a loss of $33 million a year ago, Navistar reports.
Revenues in the quarter were $1.8 billion, comparable to the first quarter last year. Chargeouts in the company’s Core (Class 6-8 trucks and buses in the United States and Canada) market were 10,600 units in the first quarter of 2021.
First quarter 2021 adjusted EBITDA doubled year-over-year to $116 million, or 6.4 percent of revenue, versus $59 million, or 3.2 percent of revenue, a year ago.
Navistar finished first quarter 2021 with $1.3 billion in consolidated cash and cash equivalents, including $1.2 billion in manufacturing cash and cash equivalents.
“We are starting 2021 on a strong note, as adjusted EBITDA margin doubled, truck revenue returned to pre-COVID levels, and retail market share increased in each of our vehicle segments,” says CEO Persio Lisboa.
Throughout the quarter, the company remained focused on its Navistar 4.0 business strategy and reinforced its position as one of the advanced technology leaders within the industry. In January, the company announced a collaboration with General Motors and OneH2 to bring a hydrogen truck ecosystem solution to the trucking industry. As part of the announcement, Navistar plans to make its first production model International RH Series hydrogen fuel cell vehicle commercially available in model year 2024.
Also in the quarter, the company announced that it acquired a second property in San Antonio that will house support functions for its under-construction 900,000 sq.-ft. plant in the area that will produce Class 6-8 vehicles, including new electric-powered trucks. The new property will also house a state-of-the-art truck validation center to test and validate components of the company’s growing electric truck business and a truck specialty center to provide post-production customization of vehicles to support customers’ business needs. The company’s total investment in the region will exceed $275 million and create over 650 jobs.
Navistar reported higher market share in each of its product segments in the first quarter of 2021, reflecting a 1.8 point increase in its total Class 6-8 trucks year-over-year. Additionally, the company reported strong first quarter 2021 Class 6-8 orders that drove the company to increase its production line-rates in both of its truck assembly plants. The company says it plans to further increase its production line-rates, contingent on the supply chain’s ability to meet higher demand schedules.
“We expect the roll-out of COVID-19 vaccines and easing of state restrictions will continue to support strong economic growth and the need for new trucks,” says Lisboa. “Our performance this quarter, along with the sustained execution of our Navistar 4.0 strategy and future opportunities with TRATON, positions Navistar to deliver increased value to our customers, dealers, partners and other stakeholders.”
The company announced that progress related to its pending merger with TRATON remains on track. At Navistar’s annual stockholder meeting on March 2, the merger proposal was approved. Additionally, the company stated that it completed filing for regulatory approvals from the required jurisdictions, and on February 12, reported that the Hart-Scott-Rodino (HSR) antitrust waiting period had expired. The company continues to believe the merger will close in mid-2021.
Truck Segment — In first quarter 2021, the Truck segment net sales were $1.2 billion, flat compared to first quarter last year, despite lower industry volumes. Lower volumes in its Core markets were offset by higher total share and volumes in Mexico, used truck, and export operations.
The Truck segment incurred a net loss of $81 million in first quarter 2021, compared to a loss of $58 million in first quarter 2020. The loss in the first quarter of 2021 included a $49 million charge related to pre-existing warranties and $47 million of charges related to the pending sale of its Melrose Park facility. Excluding these significant items, the Truck segment would have been profitable in the period, reflecting favorable product mix and improved margins, the company says.
Parts Segment — For first quarter 2021, the Parts segment net sales were $467 million, a 5 percent decrease from first quarter 2020. The decrease was primarily driven by lower volumes in the U.S. and Canada due to the continuing impact of the pandemic on the commercial truck and school bus industries.
The Parts segment saw a first quarter profit of $111 million, lower compared to $119 million in first quarter 2020 in line with lower sales.
Global Operations Segment – In first quarter 2021, the Global Operations segment net sales increased 40 percent versus first quarter 2020 to $95 million. The increase was primarily driven by higher engine volumes and parts sales in South American operations.
The Global Operations segment recorded a profit of $6 million in the first quarter of 2021, higher versus breakeven profitability in first quarter 2020 largely driven by the higher sales.
Financial Services Segment – In first quarter 2021, the Financial Services segment reported net revenues of $51 million, an 11 percent decrease from first quarter 2020. The decrease was primarily due to lower interest rates.
The Financial Services segment recorded a profit of $12 million in the quarter, lower compared to $17 million in first quarter 2020, largely due to the impact of lower average yields.
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