The truck and engine maker's revenue fell in both its truck and parts businsses. But as Fred Katayama reports, the company projects a stronger second half.
A slowdown in truck sales slamming Navistar's results. The truck and diesel engine maker swung to a quarterly loss. Revenue fell in both its truck and parts businesses. And the company took a $60 million charge on its inventory of used trucks. Pressuring revenue: Truck sales were lower in the U.S. and Canada. Parts revenue got hit from weak sales to a joint venture involving Ford and Blue Diamond. Navistar is in a bid to turn itself around. It's suffering after making a sour bet on an unsuccessful smog-reduction system that failed to meet regulatory standards. It has cut costs, changed management, and redesigned its products. Aegis Capital analyst Jeffrey Kauffman said, "Management has done the right things in applying the tourniquet and fixing what's broken. It just takes awhile to take traction." The company is optimistic, projecting a stronger second half. It also backed its revenue outlook for this year. Navistar shares turned higher after falling at the market open.