Pandemic’s Effects Reflected In Navistar’s 2020 Results
By Mike Brezonick17 December 2020
Navistar International Corp. has announced a fourth quarter 2020 net loss of $236 million, or $2.36 per diluted share, compared to fourth quarter 2019 net income of $102 million, or $1.02 per diluted share. For the year, the company reported a net loss of $347 million, or $3.48 per diluted share, versus net income of $221 million, or $2.22 per diluted share, for fiscal year 2019.
Revenues in the quarter were $2.1 billion versus $2.8 billion a year ago. Fourth quarter 2020 Core (Class 6-8 trucks and buses in the United States and Canada) charge outs were 13,200 versus 20,200 in fourth quarter 2019.
Revenue for fiscal year 2020 was $7.5 billion versus $11.25 billion in 2019. Fiscal 2020 Core charge outs were 50,400 versus 87,200 in fiscal 2019. The decrease in revenue and charge outs was primarily driven by the impact of COVID-19 on the trucking industry.
Fourth quarter 2020 results were impacted by $297 million of tax-affected significant items. Included in this amount is a $289 million accrual related to a profit-sharing dispute, a $58 million settlement with the Dept. of Justice related to Navistar Defense and a $14 million charge related to pre-existing warranties.
Adjusted net income for the fourth quarter was $61 million versus $114 million in the fourth quarter of last year. Adjusted net income for fiscal year 2020 was $10 million versus $423 million in 2019.
“While our results were affected by the pandemic and the impact of certain legal matters, we have experienced consistent sequential improvement in our business since April, which reflects broader improvement in the economy and trucking industry as well as our business performance from the implementation of our Navistar 4.0 strategy,” said Persio Lisboa, chief executive officer. “I believe that the actions and investments we have made in the business during 2020 position us to emerge from the pandemic a much stronger company.”
Individual segment results were:
Truck Segment – In fourth quarter 2020, the Truck segment net sales were $1.5 billion, a 30% decrease compared to fourth quarter last year. In fiscal year 2020, the Truck segment net sales decreased by $3.3 billion, or 38%, to $5.3 billion. The decrease was primarily due to lower volumes in Core markets due to the pandemic.
The Truck segment incurred a net loss of $10 million in fourth quarter 2020, compared to a profit of $86 million in fourth quarter 2019. For fiscal year 2020, the Truck segment incurred a net loss of $141 million, compared to profit of $269 million in full-year 2019. The decrease was a result of lower revenues and reflects the impact of legal settlements and the sale of Navistar Defense in 2019.
Parts Segment – For fourth quarter 2020, the Parts segment net sales were $496 million, a 9% decrease from fourth quarter 2019. In fiscal year 2020, the Parts segment net sales decreased by $399 million, or 18%, to $1.85 billion. The decrease was primarily due to lower volumes in the U.S. and Canada due to the pandemic.
The Parts segments saw a fourth quarter profit of $129 million, compared to $161 million in fourth quarter 2019. In fiscal year 2020, the Parts segment profit decreased by $150 million, or 25%, to $448 million. The decrease was due to the impact of lower revenues.
Global Operations Segment – In fourth quarter 2020, the Global Operations segment net sales decreased 6% versus fourth quarter 2019 to $87 million. In fiscal year 2020, the Global Operations segment net sales decreased by $90 million, or 26 percent, to $253 million. The decrease was primarily driven by lower volumes in South American operations triggered by temporary production stoppages related to the pandemic as well as unfavorable foreign currency impact.
The Global Operation segment recorded a profit of $12 million in the fourth quarter of 2020 versus a loss of $10 million in fourth quarter 2019 that included a restructuring charge. In fiscal year 2020, the Global Operations segment recorded breakeven results comparable to 2019.