Navistar (NAV 40.18, +1.67) has climbed 4.3% after beating earnings expectations and raising its guidance for the full year. The early gain has lifted the stock above its 200-day moving average (39.54), which has offered resistance since mid-April.
The truck, bus, defense vehicle, and engine manufacturer reported above-consensus second quarter earnings of $0.55 per share on a 15.6% year-over-year jump in revenue to $2.42 billion, which was just shy of market estimates.
Navistar boosted its outlook for the fiscal year, priming the market for revenue between $9.75 billion and $10.25 billion, up from the previous forecast for sales between $9.25 billion and $9.75 billion. The company's new guidance range is ahead of market estimates.
The company launched the International MV line of medium-duty trucks. The new vehicle series is expected to help Navistar grow its market share in the medium-duty segment. This gives the company optimism about its ability to grow its overall core market share during the fiscal year.
Looking at the segment breakdown, Truck segment net sales grew 22.0% to $1.70 billion due to higher volume in the core markets, higher export volumes, and higher military sales. The growth was partially offset by lower truck volumes in Mexico. Segment profit grew to $42 million from a loss of $56 million one year ago. The growth was owed to higher volumes in core markets and lower used truck losses.
Parts segment net revenue decreased 1.5% to $601 million due to lower U.S. volumes and Blue Diamond Parts sales. The decline was partially offset by higher Mexico volumes and Fleetrite parts sales. Segment operating profit declined 13.7% to $132 million. Lower U.S. margins, higher freight-related expenses, and intercompany access fees fueled the decline.
Global Operations net sales rose 39.0% to $97 million due to higher engine volumes in the South America engine operations. Segment operating profit improved to $1 million from a loss of $7 million one year ago. Higher engine volumes and cost reduction efforts fueled the increase.
Financial services net revenue grew 13.0% to $63 million due to higher overall finance receivable balances in the U.S. and Mexico. Segment operating profit jumped 26.7% to $19 million due to improved interest margins.