One year after a major truck manufacturer announced it was joining the rest of the industry and adding selective catalytic reduction or SCR emissions after-treatment to its engines, the company reported nearly a quarter billion dollars in net losses for the quarter.
Navistar International Corp. announced a net loss of $247 million for the third quarter Wednesday, or $3.06 per diluted share. The Lisle, IL-based company also announced plans to eliminate a total of 500 salaried employees and long-term contractor positions from the payroll.
Navistar reported $2.9 billion in total revenue for the third quarter, down 12 percent from the third quarter in 2012. Navistar said the decline reflects lower sales across North American sales “due to the impact of the company’s SCR emissions transition,” for heavy and medium-duty vehicles as well as a drop in truck sales across the industry. The company’s losses were offset partially by an uptick in South America engine business.
“We’re encouraged by the growing customer acceptance of our new products, said Navistar President and CEO Troy Clarke, according to a company news release. “At the same time, we clearly need to accelerate progress with our financial results and we are already implementing additional cost reduction and business improvement actions to counter our near-term volume challenges. This includes resizing our company to match our current business environment.”
“These actions are always difficult, but we are committed to making tough choices to return Navistar to profitability,” Clarke said, according to the release.
Navistar’s truck segment reported a loss of $58 million, up from $26 million during the same period in 2012. The company’s engine segment reported a loss of $86 million, up from $47 million in the third quarter last year. The parts segment reported a profit of $76 million, and its financial services segment reported a profit of $23 million.
Navistar said it is moving forward with its latest phase aimed at turning the company around – adding selective catalytic reduction emissions after-treatment to its medium-duty vehicles. Navistar’s release said the company will begin building its first saleable units this month for models offering SCR with the Cummins ISB 6.7 liter engine for International DuraStar medium-duty trucks and IC Bus CE Series school buses. The company plans to ship the first off-the-line offerings to customers in December.
Jack Allen, Navistar executive vice president and chief operating officer, said a number of customers had approached Navistar about adding the ISB with SCR as a choice, according to the release.
“Adding the Cummins ISB allows us to get medium-duty SCR offerings into the market faster while providing customers with a market-proven engine,” Allen said, according to the release. “We’re convinced the ISB will put us on a positive path to recapture medium-duty truck and school bus sales and market share.”