Navistar Feels COVID Sting In Q4 And Full-year 2020 Earnings
Navistar International Corp. (NYSE: NAV) reported COVID-impacted lower sales and earnings for its fourth quarter and fiscal year on Thursday. It is likely the final independent earnings report before its $3.7 billion sale to Volkswagen AG's Traton Group closes in 2021.
Navistar executives skipped the quarterly call with analysts because of the Nov. 7 definitive merger.
Key financial highlights
Fourth-quarter net loss of $236 million, or $2.36 per diluted share, including $297 million of tax-affected significant items. Adjusted net income of $61 million on revenues of $2.1 billion compared to $2.8 billion in the fourth quarter of 2019. Net income in the same quarter of 2019 was $102 million, or $1.02 per diluted share.
Full-year net loss of $347 million, or $3.48 per diluted share. Adjusted net income of $10 million on revenues of $7.5 billion compared to $11.25 billion in all of 2019's fiscal year. Full-year 2019 net income was $221 million, or $2.22 per diluted share.
Adjusted fourth-quarter earnings before interest, taxes, depreciation and amortization (EBITDA) of $169 million (8.2%) compared to $219 million (7.9%). Full-year EBITDA was $420 million (5.6%) compared to $882 million (7.8%).
Set aside $289 million in a profit-sharing dispute and $58 million fine to the U.S. Justice Department in a whistleblower suit over allegedly forged invoices at Navistar Defense.
All four business segments — trucks, parts, global operations and financial services — reported lower results for the quarter and three of four were down for the year.
Navistar ended the fiscal year with $1.8 billion in cash and cash equivalents. Its manufacturing cash balance grew quarter over quarter through all of fiscal 2020.
"While our results were affected by the pandemic and the impact of certain legal matters, we have experienced consistent sequential improvement in our business since April," Navistar CEO Persio Lisboa said in a press release.
Market share losses
Navistar invoiced 13,200 Class 6-8 trucks and buses in the quarter compared to 20,200 in the August-October period of 2019. For the fiscal year, so-called charge-outs fell to 50,400 compared to 87,200.
Navistar lost 2.7 percentage points of market share in combined on-highway and severe service Class 8 trucks to finish the year at 11.4%. Daimler Trucks North America and PACCAR Inc. account for nearly 70% of the market. Volvo Trucks North America is the other major player. It lost 6 percentage points of share in Class 6-7 medium-duty trucks to 21%.
The merger to come
TRATON, which includes the Scania and Man brands, pursued a Navistar buyout so it could gain entry into the North American market.
For Navistar, the merger gives it the resources to compete in the technology changes sweeping heavy-duty trucking. Navistar is partnering with startup TuSimple to sell a Level 4 autonomous truck in 2024. Traton also is working with TuSimple.
"Looking forward, our exciting opportunity with TRATON will build further on this foundation, accelerating our progress and delivering long-term, sustainable benefits for our stakeholders," Lisboa said.
Sales and service organizations combined
Separately, Navistar on Wednesday restructured its commercial business into a single integrated organization including sales and service of International trucks, IC Bus vehicles and Navistar's after-sales products and services. The division will be headed by Friedrich Baumann as president.
Baumann joined Navistar in 2018 as senior vice president of strategy and planning following a 24-year career at Daimler Trucks North America. In 2019, he was named Navistar's president for after-sales.
Related articles:
TRATON and Navistar reach definitive $3.7 billion merger deal
Navistar to sell driverless semis in 2024
Whistleblower suit alleges Navistar forged military vehicle invoices
Click for more FreightWaves articles by Alan Adler.
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