A month has gone by since the last earnings report for Navistar International Corp. . Shares have lost about 8.7% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is the stock due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Navistar Posts Loss in Q4
Navistar reported fourth-quarter fiscal 2016 (ended Oct 31, 2016) loss from continuing operations of $0.28 per share, as against an adjusted net profit of $0.36 recorded in the year-ago quarter. The Zacks Consensus Estimate for earnings was $0.24 per share.
On a reported basis, Navistar recorded a net loss from continuing operations of $34 million or $0.42 per share, narrower than a loss of $50 million or $0.61 in the prior-year quarter.
Navistar’s revenues fell 17% year over year to $2.06 billion in the quarter, missing the Zacks Consensus Estimate of $2.18 billion. The decline resulted from lower volumes in the company's core U.S. and Canadian markets for Class 6-8 trucks and buses.
Fiscal 2016 Results
Navistar reported an adjusted loss from continuing operations of $62.1 million or $0.76 per share in fiscal 2016, compared with a loss of $49 million or $0.60 in fiscal 2015. Loss per share was wider than the Zacks Consensus Estimate of a loss of $0.43 . On a reported basis, Navistar reported a net loss from continuing operations of $97 million or $1.19 per share in fiscal 2016, compared with a loss of $184 million or $2.25 in fiscal 2015.
Revenues dropped 9.8% to $8.1 billion from $10.1 billion in fiscal 2015. The figure marginally missed the Zacks Consensus Estimate of $8.2 billion.
Segment Details
Revenues at Navistar’s Truck segment decreased 19.9% year over year to $1.4 billion. The segment recorded a loss from continuing operations of $61 million, considerably narrower than a loss of $36 million in the prior-year quarter. The wider loss was due to increased used truck losses and a mix shift to units with lower margins in core markets. However, the segment gained from lower adjustments to pre-existing warranties and the non-recurrence of restructuring charges recorded in the prior year from a voluntary separation program.
Revenues at Navistar’s Parts segment decreased 5.5% year over year to $613 million in the reported quarter. The segment registered a profit of $162 million, lower than $163 million recorded in the year-ago quarter. The decreased profit was a result of the impact of the Blue Diamond Parts, LLC joint venture, partially offset by margin improvements and cost-reduction mechanisms.
Revenues at Navistar’s Global Operations segment plunged 24.3% to $87 million. The segment recorded a loss of $2 million in the quarter as compared with a loss of $27 million a year ago.
Revenues at Navistar’s Financial Services segment were $58 million, in line with year-ago figure. The segment registered a profit of $23 million, down from $26 million in the fourth quarter of fiscal 2015. The year-over-year decrease was due to higher interest expense, partially offset by cost-reduction initiatives.
Financial Position
Navistar had cash and cash equivalents of $804 million as of Oct 31, 2016, down from $912 million as of Oct 31, 2015. As of Oct 31, 2016, notes payable and long-term debt was $4.9 billion compared with $5.3 billion as of Oct 31, 2015.
Net cash flow operations totaled $267 million in fiscal 2016 versus $46 million in the year-ago period. Capital expenditure totaled $116 million, up from $115 million in the year-ago period.
Guidance
Navistar projects Class 6–8 retail deliveries in the U.S. and Canada in the range of 305,000–335,000 units for fiscal 2017.
Revenues for fiscal 2017 are expected to be similar to fiscal 2016 level. Adjusted EBITDA is anticipated to be higher than last year. Manufacturing cash at the end of fiscal 2017, including capital injection from Volkswagen Truck & Bus, is projected at around $800 million.
How Have Estimates Been Moving Since Then?
In the past month, the stock has witnessed a downward trend in fresh estimates. There has been one revision higher for the current quarter compared to five lower. In the past month, the Zacks Consensus Estimate has shifted significantly downward due to these changes.
VGM Scores
At this time, Navistar International's stock has a strong Growth score of 'A', though it is lagging a lot on the momentum front with an 'F'. However, the stock was allocated a grade of 'A' on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregte VGM score of 'A'. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of these revisions also indicates a downward shift. Interestingly shares of NAV have a Zacks Rank #3 (Hold). We expect an inline return from the stock in the next few months.
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Why Is Navistar (NAV) Down Nearly 9% Since the Last Earnings Report?
A month has gone by since the last earnings report for Navistar International Corp. . Shares have lost about 8.7% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is the stock due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Navistar Posts Loss in Q4
Navistar reported fourth-quarter fiscal 2016 (ended Oct 31, 2016) loss from continuing operations of $0.28 per share, as against an adjusted net profit of $0.36 recorded in the year-ago quarter. The Zacks Consensus Estimate for earnings was $0.24 per share.
On a reported basis, Navistar recorded a net loss from continuing operations of $34 million or $0.42 per share, narrower than a loss of $50 million or $0.61 in the prior-year quarter.
Navistar’s revenues fell 17% year over year to $2.06 billion in the quarter, missing the Zacks Consensus Estimate of $2.18 billion. The decline resulted from lower volumes in the company's core U.S. and Canadian markets for Class 6-8 trucks and buses.
Fiscal 2016 Results
Navistar reported an adjusted loss from continuing operations of $62.1 million or $0.76 per share in fiscal 2016, compared with a loss of $49 million or $0.60 in fiscal 2015. Loss per share was wider than the Zacks Consensus Estimate of a loss of $0.43 . On a reported basis, Navistar reported a net loss from continuing operations of $97 million or $1.19 per share in fiscal 2016, compared with a loss of $184 million or $2.25 in fiscal 2015.
Revenues dropped 9.8% to $8.1 billion from $10.1 billion in fiscal 2015. The figure marginally missed the Zacks Consensus Estimate of $8.2 billion.
Segment Details
Revenues at Navistar’s Truck segment decreased 19.9% year over year to $1.4 billion. The segment recorded a loss from continuing operations of $61 million, considerably narrower than a loss of $36 million in the prior-year quarter. The wider loss was due to increased used truck losses and a mix shift to units with lower margins in core markets. However, the segment gained from lower adjustments to pre-existing warranties and the non-recurrence of restructuring charges recorded in the prior year from a voluntary separation program.
Revenues at Navistar’s Parts segment decreased 5.5% year over year to $613 million in the reported quarter. The segment registered a profit of $162 million, lower than $163 million recorded in the year-ago quarter. The decreased profit was a result of the impact of the Blue Diamond Parts, LLC joint venture, partially offset by margin improvements and cost-reduction mechanisms.
Revenues at Navistar’s Global Operations segment plunged 24.3% to $87 million. The segment recorded a loss of $2 million in the quarter as compared with a loss of $27 million a year ago.
Revenues at Navistar’s Financial Services segment were $58 million, in line with year-ago figure. The segment registered a profit of $23 million, down from $26 million in the fourth quarter of fiscal 2015. The year-over-year decrease was due to higher interest expense, partially offset by cost-reduction initiatives.
Financial Position
Navistar had cash and cash equivalents of $804 million as of Oct 31, 2016, down from $912 million as of Oct 31, 2015. As of Oct 31, 2016, notes payable and long-term debt was $4.9 billion compared with $5.3 billion as of Oct 31, 2015.
Net cash flow operations totaled $267 million in fiscal 2016 versus $46 million in the year-ago period. Capital expenditure totaled $116 million, up from $115 million in the year-ago period.
Guidance
Navistar projects Class 6–8 retail deliveries in the U.S. and Canada in the range of 305,000–335,000 units for fiscal 2017.
Revenues for fiscal 2017 are expected to be similar to fiscal 2016 level. Adjusted EBITDA is anticipated to be higher than last year. Manufacturing cash at the end of fiscal 2017, including capital injection from Volkswagen Truck & Bus, is projected at around $800 million.
How Have Estimates Been Moving Since Then?
In the past month, the stock has witnessed a downward trend in fresh estimates. There has been one revision higher for the current quarter compared to five lower. In the past month, the Zacks Consensus Estimate has shifted significantly downward due to these changes.
Navistar International Corp. Price and Consensus
Navistar International Corp. Price and Consensus | Navistar International Corp. Quote
VGM Scores
At this time, Navistar International's stock has a strong Growth score of 'A', though it is lagging a lot on the momentum front with an 'F'. However, the stock was allocated a grade of 'A' on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregte VGM score of 'A'. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of these revisions also indicates a downward shift. Interestingly shares of NAV have a Zacks Rank #3 (Hold). We expect an inline return from the stock in the next few months.