Navistar International Corp. saw earnings dip in the third quarter but still beat investor expectations.
The owner of the International truck brand posted net income of $156 million for the period. That compares with earnings of $170 million in the same quarter a year earlier.
Revenue rose 17 percent to $3 billion. Much of the gain came from a 28 percent increase in sales of Class 6-8 trucks and buses in the United States and Canada.
So-called EBITDA, an important measure of the company’s cash flow, rose 22 percent to $266 million. That was nearly 10 percent above investor expectations, said David Leiker, an analyst at Baird Equity Research. Revenue and earnings per share also beat expectations, he said in a note to investors.
“This was another great quarter for Navistar,” said Troy Clarke, Navistar’s chief executive. “Market share increased, revenues and earnings grew at double-digit rates, and we made significant investments in our operations.”
The company said its market share for its core trucks and buses now approaches 18 percent.
Navistar, which nearly did not survive the last recession and a series of operational errors, ended the third quarter 2019 with roughly $1.2 billion in consolidated cash, cash equivalents and marketable securities
“We are on course for a strong end to 2019, and we’re not standing still,” Clarke said. “The company is recapturing market share and is growing revenue, EBITDA and cash flow. We remain focused on setting ourselves up for long-term success.”
Clark noted a series of milestones reached during the quarter. The company’s warranty and service partnership agreement with truck-stop giants Love’s and Speedco became operational. The deal created the trucking industry’s most extensive service network in North America.
Navistar also opened a parts distribution center near Memphis to help cater to the growing demand for quicker maintenance turnaround times. The center’s proximity to FedEx’s hub allows it to get parts to service centers quickly.
The company also launched an improved retail inventory management system. That stages parts at the locations where they are most likely to be needed. It cut emergency parts orders by 50 percent and is reducing the time it takes to repair customers’ trucks.
Navistar forecast industry retail deliveries of Class 6-8 trucks and buses in the United States and Canada to reach 435,000 to 455,000 vehicles this year. Deliveries of trucks in the heaviest Class 8 segment will be between 295,000 and 315,000 units.
That will decline next year. Navistar forecasts the industry’s 2020 retail deliveries of Class 6-8 trucks and buses in the United States and Canada will be 335,000 to 365,000 units. Class 8 retail deliveries will come in between 210,000 and 240,000 vehicles.