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Navistar (NAV) Q2 Earnings Top, Sales Lag Mark, Rise Y/Y

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Navistar International Corporation  reported second-quarter fiscal 2021 adjusted earnings of 72 cents per share, beating the Zacks Consensus Estimate of 38 cents and comparing favorably with the year-ago loss of 10 cents. Higher-than-expected sales from Trucks, Parts and Global Operations units led to the outperformance. The truck maker posted total revenues of $2,162 million for the April-end quarter, missing the Zacks Consensus Estimate of $2,296 million. However, the top line increased from the year-ago level of $1,925 million.

Segmental Performance

The Truck segment’s total net sales were $1,485 million for the reported quarter compared with $1,389 million in the year-ago period on higher used truck volumes. The segment generated a profit of $189 million, turning around from a loss of $51 million reported in the year-ago quarter.

The Parts segment net sales rose 18% from the year-ago quarter to $524 million, thanks to higher volumes in the United States and Canada. The metric also topped the consensus mark of $514 million. The segment’s profit was $135 million, up 31% on a year-over-year basis.

Net sales from the company’s Global operations amounted to $138 million, which increased a whopping 171% year over year and outpaced the Zacks Consensus Estimate of $74 million. Higher engine and power generator volumes along with robust parts sales from South African operations resulted in this upside. The segment reported an income of $36 million versus a loss of $13 million in the year-ago period.

Net sales in Navistar’s Financial Services segment totaled $50 million, down from $64 million reported in second-quarter fiscal 2020 amid low interest rates. Consequently, the segment profits were down to $15 million from the year-ago quarter’s $24 million.

Financial Position

The Illinois-based trucking giant had cash and cash equivalents of $1,233 million as of Apr 30, 2021, lower than $1,843 million on Oct 31, 2020. At fiscal second quarter-end, long-term debt was $4,624 million, down from $4,690 million as of Oct 31, 2020. The company remains on track to close the merger with TRATON by mid-2021.

Navistar currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the industry include American Axle & Manufacturing (AXL - Free Report) , BRP Inc. (DOOO - Free Report) , and Commercial Vehicle Group (CVGI - Free Report) , each sporting Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

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