Navistar International Corporation announced Tuesday strong 2017 fourth quarter earnings of $135 million net income, compared to a net loss of $34 million last year, which helped the company post an overall net income of $30 million for the 2017 fiscal year.
Navistar says its fourth quarter 2017 adjusted EBITDA was $268 million, which included $11 million of adjustments. Adjusted EBITDA margins increased to 10.3 percent. Fiscal year 2017 adjusted EBITDA was $582 million, versus $508 million adjusted EBITDA for 2016. Full-year adjusted EBITDA margins increased to 6.8 percent. The company’s $135 million income this quarter equals $1.36 per diluted share, and the $30 million fiscal year income is $0.32 per diluted share, a major improvement over a net loss of $97 million and $1.19 per diluted share in 2016.
“Our 2017 was a breakthrough year, as we returned to profitability and grew our market share 1.5 points,” says Troy A. Clarke, chairman, president and CEO. “These results were driven by stronger sales, our steady investment in the industry’s newest product lineup, early results from our strategic alliance with Volkswagen Truck & Bus and our ongoing focus on cost.”
Navistar says revenues in the fourth quarter increased 26 percent, to $2.6 billion, compared to fourth quarter 2016. The revenue increase was largely driven by a 31-percent increase in the company’s core (Class 6-8 trucks and buses in the United States and Canada) volumes. Revenue for fiscal year 2017 was up six percent to $8.6 billion, compared to $8.1 billion in fiscal year 2016.
Navistar finished the fourth quarter 2017 with $1.1 billion in consolidated cash, cash equivalents and marketable securities including $1.0 billion in manufacturing cash, cash equivalents and marketable securities, the company says.
Also during the fourth quarter, Navistar and Volkswagen Truck & Bus announced its intention to converge its connected vehicle activities – OnCommand Connection and RIO, Volkswagen Truck & Bus’s digital brand. OnCommand Connection now has an industry leading 370,000 connected vehicles, the company says.
Finally, Navistar refinanced its manufacturing debt in early November, which improved its debt profile and provided greater financial flexibility. The transaction yielded $200 million of additional liquidity and extended the company’s debt maturities by four years. Additionally, it will save approximately $25 million in annualized interest in 2018 and $34 million in 2019, following the repayment of convertible debt that comes due in 2018, the company says.
“We think 2018 is shaping up to be one of the strongest industry years this decade, and we’re positioned to make it a breakout year for Navistar,” Clarke says. “We’ll drive even greater customer consideration with our commitment to uptime and our ongoing cadence of new product launches, which will include the introduction of our new medium-duty vehicle, as well as new IC Bus offerings. At the same time, we will build on our alliance with Volkswagen Truck & Bus by investing in and collaborating on the major technologies that are reshaping our industry, including electric, connectivity and autonomous.”