Navistar reported a net loss of $34 million Thursday morning, just days after the company announced German automaker Volkswagen plans to invest $256 million and purchase a roughly 17-percent stake in the truckmaker.
Analysts and company officials attributed the third quarter loss in part to soft demand in the truck market.
“This quarter’s results show that we continue to make progress in the face of tougher market conditions, particularly in the heavy segment,” said Troy Clarke, Navistar’s president and CEO in a statement. “As we pursue our goal of market share growth, we do see some encouraging signs in the area of order share, where year-to-date share of new orders continues to be up for the past three quarters.”
The company is in a better position despite Thursday’s financial report because of the announcement earlier this week that Volkswagen plans to make a significant investment in the Illinois-based truckmaker, said Vicki Bryan, a senior high yield analyst with Gimme Credit, an independent research service on corporate bonds.
Navistar employs more than 1,500 workers at its Springfield plant, and thousands of retirees also live in the area. Employment is steadily growing locally after the truckmaker previously announced two separate deals to build GM vehicles in Springfield.
“Of course Navistar’s story now is all about its strongly improved prospects with the transformative alliance announced this week with Volkswagen in addition to already expanding ventures with General Motors and the U.S. military in addition to launches of new products on deck now and planned in collaboration with its strong new partnership,” Bryan said in notes in the earnings report Thursday.
In the quarterly report filed with the U.S. Securities and Exchange Commission, Navistar officials also said a unit of the firm — Navistar Defense LLC — received a subpoena from the U.S. Department of Defense Inspector General during the third quarter this year.
“The subpoena requested documents relating to Navistar Defense’s sale of its independent suspension systems for military vehicles to the government for the time period of January 1, 2009, through December 31, 2010,” the filing stated.
It’s unclear what impact the issue might eventually have on the company’s financial condition, according to the filing, but Navistar officials have submitted documents and plan to fully comply with the subpoena.
Navistar’s third quarter loss of $34 million, or 42 cents per share, widened slightly compared to the same quarter last year when Navistar reported a net loss of $28 million, or 34 cents per share.
The company reported total revenue for the quarter was about $2.1 billion, down about 18 percent compared to the same time last year.
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