Navistar reports net loss for Q1
By Mike Brezonick09 March 2021
Navistar International Corp. today announced a first quarter 2021 net loss of $81 million compared to first quarter 2020 net loss of $36 million. The loss in the first quarter of 2021 included $86 million of tax-effected significant items.
First quarter 2021 adjusted net income was $5 million compared to a loss of $33 million a year ago.
Revenues in the quarter were $1.8 billion, comparable to the first quarter last year. Chargeouts in the company’s core (Class 6-8 trucks and buses in the United States and Canada) market were 10,600 units in the first quarter of 2021.
“We are starting 2021 on a strong note, as adjusted EBITDA margin doubled, truck revenue returned to pre-COVID levels, and retail market share increased in each of our vehicle segments,” said Persio Lisboa, chief executive officer.
Throughout the quarter, the company remained focused on its Navistar 4.0 business strategy. In January, the company announced a collaboration with General Motors and OneH2 to bring a hydrogen truck ecosystem solution to the trucking industry (see story in March Diesel Progress). As part of the announcement, Navistar plans to make its first production model International RH Series hydrogen fuel cell vehicle commercially available in model year 2024.
Navistar reported higher market share in each of its product segments in the first quarter of 2021, reflecting a 1.8 point increase in its total Class 6-8 trucks year-over-year. Additionally, the company reported strong first quarter 2021 Class 6-8 orders that drove the company to increase its production line-rates in both of its truck assembly plants. The company plans to further increase its production line-rates, contingent on the supply chain’s ability to meet higher demand schedules.
“We expect the roll-out of COVID-19 vaccines and easing of state restrictions will continue to support strong economic growth and the need for new trucks,” said Lisboa. “Our performance this quarter, along with the sustained execution of our Navistar 4.0 strategy and future opportunities with Traton positions Navistar to deliver increased value to our customers, dealers, partners and other stakeholders.”
The company said that its pending merger with Traton is expected to close in mid-2021.
A review of some of the company’s business segments in the first quarter shows:
- Truck segment net sales were $1.2 billion, flat compared to first quarter last year, despite lower industry volumes. Lower volumes in its core markets were offset by higher total share and volumes in Mexico, used truck, and export operations, the company said. The Truck segment incurred a net loss of $81 million in first quarter 2021, compared to a loss of $58 million in first quarter 2020. The loss in the first quarter of 2021 included a $49 million charge related to pre-existing warranties and $47 million of charges related to the pending sale of its Melrose Park facility. Excluding these significant items, the Truck segment would have been profitable in the period, reflecting favorable product mix and improved margins.
- For first quarter 2021, the Parts segment net sales were $467 million, a 5% decrease from first quarter 2020. The decrease was primarily driven by lower volumes in the U.S. and Canada due to the continuing impact of the pandemic on the commercial truck and school bus industries, Navistar said. The Parts segment saw a first quarter profit of $111 million, lower compared to $119 million in first quarter 2020 in line with lower sales.
- The Global Operations segment net sales increased 40% versus first quarter 2020 to $95 million. Navistar said the increase was primarily driven by higher engine volumes and parts sales in South American operations. The Global Operations segment recorded a profit of $6 million in the first quarter of 2021, higher versus breakeven profitability in first quarter 2020 largely driven by the higher sales.