Navistar to Launch ICT+


Navistar International Corporation (NAV) announced its plan to launch the next-generation clean engine system – In-Cylinder Technology Plus (ICT+) – to meet 2010 U.S. Environmental Protection Agency (:EPA) emissions standards. The technology will also support the greenhouse gas (:GHG) rules before its requirement in 2014 and 2017.

The new technology will help Navistar provide the cleanest and most fuel efficient diesel engines in the world, which would be beneficial both to the customers and the environment. Use of liquid urea in the new engine will help in mitigating emissions of nitrogen oxide. Nitrogen oxide is one of the pollutants responsible for asthma.

All set to achieve the 2017 GHG standards, Navistar incorporates a previously proven and certified after treatment technology, which will be available in 2013. To provide uninterrupted supplies during the transition, the company will be delivering the current EPA-compliant trucks in all vehicle classes.

Navistar has also shared the new technology with EPA and the California Air Resources Board (CARB) to ensure the supply during the transition to ICT+ technology.

Warrenville, Illinois-based Navistar manufactures and sells commercial trucks, mid-range diesel engines, buses, military vehicles and chassis for motor homes and step-vans. It also provides service parts for various trucks and trailers. The company is one of the largest truck producers apart from Daimler AG (DDAIF) and PACCAR Inc. (PCAR).

The company reported a loss of $137 million or $1.99 per share (excluding special items) in the second quarter of fiscal 2012, in sharp contrast to a profit of $102 million or $1.30 per share recorded in the corresponding quarter last year. The results missed the Zacks Consensus Estimate.

Revenues went down 2.9% year-over-year to $3.3 billion, also falling behind the Zacks Consensus Estimate. The decline was attributable to a decrease in sales in Engine and Part segments, which was partially offset by higher sales in the Truck segment.

Currently, Navistar retains a Zacks #5 Rank, which translates into a short-term (1 to 3 months) Strong Sell rating. We have a long-term (more than 6 months) Underperform recommendation on the stock.

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