Navistar Posts Q3 Profit on Tax Benefit, Plans Job Cuts

by Christopher Freeburn | September 6, 2012 9:57 am

Navistar Posts Q3 Profit on Tax Benefit, Plans Job Cuts

Navistar International (NYSE:NAV[1]) announced on Thursday that it earned $84 million during its fiscal third quarter[2], down 94% from $1.4 billion in the same time last year.

But that profit was due to a one-time tax gain of $196 million. Excluding the tax benefit and other charges, the company lost $100 million in the third quarter. Last year’s profit was also inflated by a $1.48 billion tax valuation change. Without that, it lost $54 million in the third quarter of last year.

The commercial truckmaker recorded revenue of $3.3 billion, off 6% from $3.5 billion in 2011, but topping the $3.03 billion Wall Street had forecast, Bloomberg noted.

Investors were buoyed by the news. Navistar shares jumped about 7% in Thursday morning trading.

Company officials said they were “not pleased” with the results and planned trim annual costs by between $150 million and $175 million. Navistar will attempt to sell assets and slash payrolls in order to meet that goal. Layoffs are expected to begin next quarter.

A number of private equity firms, as well as Carl Icahn, have purchased significant stakes in the company.

The dismal quarterly numbers come a week after the¬†sudden retirement¬†of CEO Daniel Ustian. His departure followed Navistar’s failed effort to win Environmental Protection Agency certification for a newly developed diesel engine.

Endnotes:
  1. NAV: http://studio-5.financialcontent.com/investplace/quote?Symbol=NAV
  2. during its fiscal third quarter: http://www.businessweek.com/ap/2012-09-06/navistar-3q-profit-falls-reviews-business-units

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