42.63, +2.03, +5.00%) is up premarket after comfortably beating third quarter earnings
expectations and raising its revenue and deliveries guidance for the fiscal
The manufacturer of trucks, buses, and defense vehicles reported above-consensus third quarter earnings of $1.71 per share on revenue, which jumped 17.8% year/year to $2.61 bln, but was shy of estimates.
Going forward, Navistar expects that revenue for the fiscal year will be between $10.1 bln and $10.4 bln, up from the previous outlook for sales between $9.75 bln and $10.25 bln. Industry retail deliveries of Class 6-8 trucks and buses in the U.S. and Canada are forecast between 390,000 and 410,000 while Class 8 retail deliveries are expected between 260,000 and 280,000, up from previous guidance for deliveries between 250,000 and 280,000. Adjusted EBITDA is expected between $775 mln and $825 mln, up from previous expectations for adjusted EBITDA between $725 mln and $775 mln.
Returning to third quarter results, revenue growth was fueled by a 26.0% increase in Class 6-8 trucks and buses in the United States and Canada. Class 8 heavy retail market share increased 2.7 points thanks to strong sales of LT Series on-highway truck and 12.4-liter A26 engines. International A26 engine market share penetration more than doubled year/year.
Truck segment revenue grew 25% to $1.9 bln due to higher volumes in core markets, higher military sales, and a favorable shift in model mix. Segment profit surged to $165 mln from $7 mln one year ago. The growth was fueled by higher volumes and lower charges related to legacy engine litigation. A settlement of a business economic claim also boosted the profit growth rate.
Parts segment revenue grew 3.2% to $605 mln due to double-digit growth of the Fleetrite brand, which was partially offset by lower sales of Blue Diamond Parts. Segment profit declined 8.3% to $144 mln due to lower proprietary parts sales, higher freight-related expenses and intercompany access fees.
Global Operations revenue increased 6.0% to $89 mln due to higher engine volumes. Segment profit increased 33.3% to $4 mln.
Financial services revenue grew 4.8% to $65 mln due to higher average portfolio balances. Segment profit was unchanged year/year at $23 mln.
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