Navistar (NAV 34.25, +0.32) has climbed 0.9% in pre-market after beating expectations and reaffirming its guidance. The pre-market uptick puts the stock on track to challenge its 2017 high of $34.70, which was registered on Friday.
The manufacturer of trucks, buses, defense vehicles, and engines reported above-consensus third quarter earnings of $0.38 per share on a 6.1% year-over-year increase in revenue to $2.21 billion, which was also better than expected.
An increase in truck segment volumes drove the overall revenue growth. Truck segment sales grew 10.0% year-over-year to $1.50 billion due to higher volumes in core markets like the U.S. and Canada, an increase in Mexico truck volumes, and production ramp of GM-branded units manufactured in Ohio.
Chargeouts in core markets grew 15.0% during the third quarter. Segment operating income grew by $61 million to $7 million, thanks to higher volumes, lower used truck losses, and lower restructuring charges.
Parts sales declined 1.5% year-over-year to $580 million, due to lower Blue Diamond Parts sales and lower volumes in North America. This was partially offset by higher sales of Fleetrite all-makes brand and ReNEWed remanufactured sales in U.S. and Canada. Segment operating profit increased 3.0% to $157 million due to income from a sale of a business line and lower intercompany access fees.
Global Operations net sales were unchanged at $74 million. Segment profit improved by $8 million to $3 million due to lower manufacturing and selling, general, and administrative expenses, coupled with income from the sale of machinery and equipment.
Navistar reiterated its guidance for the full year, expecting deliveries of Class 6-8 trucks between 305,000 and 335,000 units. Revenue for the full year is expected to be consistent with 2016 sales while adjusted EBITDA is expected to show year-over-year improvement.