Increased 2008 sales to the US military drove Navistar International Corp annual revenue up 20 percent to $14.7 billion, helping to produce a profit for the year and nearing record sales, according to Navistar information.
“We are controlling our own destiny by growing our business in military sales and commercial truck revenue outside the United States and Canada,” Daniel C Ustian, Navistar chairman, president, and chief executive officer stated in a news release. “And we expect to develop a sustainable business of approximately $2 billion a year selling military vehicles and parts to the US and its allies.”
The 2008 revenue produced near record earnings for the company, excluding asset impairment charges and record revenues for the fiscal year 2008, which ended October 31. Sales were up from $12.3 billion a year ago, according to company information.
Fourth quarter and full year truck shipments of expansionary and US military units accounted for 29 percent and 36 percent, respectively, of Navistar’s worldwide truck shipments, continuing to offset the weak US and Canadian traditional truck market, Navistar said.
Fiscal 2008 worldwide engine shipments decreased 15 percent to 345,500, principally due to reduced orders for diesel engines in Ford heavy-duty pickups. The company believes its sales to Ford are unlikely to return to historical volumes and has idled plants to mitigate this impact.
However, Navistar projected intercompany engine shipments will increase as production of the new MaxxForce 11-liter and 13-liter big bore engines continue to ramp up. In fiscal 2008, engine shipments to other manufacturers, excluding Ford, and Navistar’s own truck group increased by about 25,700 units from the prior year.
“Our strategy of building great products, achieving a more competitive cost structure and finding profitable growth opportunities has enabled us to fundamentally change our profitability even in these turbulent economic times,” Ustian said.
In addition to the military sales, major factors in the company’s 2008 performance were increased market share in the Class 8 segment led by the International ProStar, growth in South American engine sales, and expansion into global markets.
“We have achieved this substantial progress by diversifying and expanding into new business opportunities with little capital investment as well as leveraging our core strengths and the strengths of companies that have become our partners,” Ustian said.
Navistar reported a loss for the current fourth quarter of $343 million, or $4.81 per diluted share, compared with a loss of $103 million, or $1.46 per diluted share in the fourth quarter a year ago.
For the full fiscal year, the company demonstrated solid progress in its business strategy by delivering net income of $134 million, or $1.82 per diluted share, and manufacturing segment profit of $719 million, compared with a loss of $120 million, or $1.70 per diluted share for fiscal 2007, and manufacturing segment profit of $426 million in fiscal 2007.
At a time when the commercial truck industry is severely depressed in North America, Navistar said it is growing beyond the cyclicality of its traditional markets, and delivered strong revenues and earnings in fiscal 2008. Truck industry volume in 2008 at 244,100 units was nearly half the industry volume two years earlier and far weaker than many had predicted. In fiscal 2007, comparable industry volume totaled 319,000 units.