Weaker truck sales in its North American business led Lisle-based Navistar International to a net loss of $247 million in the third fiscal quarter of 2013.
The figure was down from a net income of $84 million for the same period last year.
Continuing operations for the quarter were down $237 million, or $2.94 per diluted share, compared to an income $80 million, or $1.16 per diluted share, for the same period in 2012. Third quarter 2012 results included an income tax benefit of $188 million that primarily resulted from a change in the company's estimated annual effective tax rate, the company noted.
Navistar blamed the decline on lower volumes in its core North America truck business due to the impact of the company's transition to Cummins' EPA-compliant engine-based products and weaker industry conditions. The company added the loss was partially offset by a $36 million reduction in engineering and product development costs and $14 million in lower selling, general and administrative expenses.
Navistar President and CEO Troy A. Clarke said the company has taken a number of cost-cutting initiatives in the past month, which involves the elimination of 500 jobs, that should generate an estimated $50 million to $60 million for the company by the end of the fiscal year.
"We're encouraged by the growing customer acceptance of our new products," Clarke said. "At the same time, we clearly need to accelerate progress with our financial results, and we are already implementing additional cost reduction and business improvement actions to counter our near-term volume challenges. This includes resizing our company to match our current business environment."
Total revenue in the quarter was $2.9 billion, down 12 percent from the third quarter of 2012. The company said losses in North American business were partially offset by stronger year-over-year volumes in the South America engine business.
Navistar finished the third quarter 2013 with $1.09 billion in manufacturing cash and marketable securities, delivering at the high end of its cash guidance range of $1.0 billion to $1.1 billion, as a result of strong cash management and working capital performance.
"We were pleased with our strong cash performance in the quarter. We also continued to make solid progress on key elements of our Drive to Deliver turnaround plan, especially the on-time launches of our new Class 8 product offerings, which drove Navistar's order share up to more than 20 percent in the quarter, compared to 12 percent in the second quarter," Clarke said. "We are committed to making tough choices to return Navistar to profitability."