QUOTE AND NEWS
Automotive World  Nov 17  Comment 
This exclusive Automotive World report provides insight into Navistar’s production plans through to 2018. There are signs of some recovery in market share as Navistar introduces products under its new engine strategy, and Navistar's calendar...
Automotive World  Nov 7  Comment 
A subsidiary of Navistar Financial Corporation (NFC) has sold $250 million of wholesale floor plan notes in a two-year 144-A securitized transaction to support International® Truck and IC Bus™ dealer inventory funding. It will replace...
Market Intelligence Center  Nov 7  Comment 
After closing Thursday at $36.09, Navistar International Corp. (NAV) presents an attractive opportunity to get a 7.02% return in just 71 days, which is an annualized return of 36.07% (for comparison purposes only). To enter this trade, sell one...
Automotive World  Nov 7  Comment 
Walter Borst, Bill Kozek and Persio Lisboa Given Expanded Responsibilities; Chief Operating Officer Jack Allen Announces Retirement After 33 Years with the Company Navistar, Inc. today announced it is restructuring its senior leadership team by...
StreetInsider.com  Nov 6  Comment 
Visit StreetInsider.com at http://www.streetinsider.com/Management+Changes/Navistar+International+%28NAV%29+COO+Jack+Allen+to+Retire/9984474.html for the full story.
Market Intelligence Center  Oct 27  Comment 
Navistar International Corp. (NAV) traded between $34.44 and $35.10 before closing at $34.80 Friday and presents some attractive trading opportunities today. MarketIntelligenceCenter.com’s algorithms have picked a Jan. '15 $34.00 covered call...
Automotive World  Oct 5  Comment 
OnCommand™ Connection integrates mobile app, customized geo-fencing capabilities and supplier components Company displays its most fuel efficient ProStar®; new spec achieves impressive results Navistar, Inc. today will highlight its most fuel...
Market Intelligence Center  Sep 25  Comment 
The patented option trade-picking algorithms behind MarketIntelligenceCenter.com's Artificial Intelligence Center have selected a covered call trade on Navistar International Corp. (NAV) that includes 5.13% downside protection. Sell one contract...
Automotive World  Sep 25  Comment 
First engine rolls off production line at new engine facility in Hefei, China Engine plant can support production of 200,000 units annually Navistar International Corporation (NYSE: NAV) announced today that Anhui Jianghuai Navistar Diesel Engine...
Automotive World  Sep 23  Comment 
Navistar, Inc. today announced it will offer the Tremec 10-speed manual transmission in its International® ProStar® model with the company’s 13-liter engine. Tremec offers a wide range of high torque-to-weight ratios designed for weight...




 

Navistar International (NYSE: NAV) makes commercial trucks and diesel engines. The company's largest customer is Ford, which buys PDQ for its XYZ, accounted for 9% of total revenues in 2009, a significant amount for a single customer.[1] As a result of its focus on trucks, NAV grew rapidly when trucks became popular consumer vehicles, but has been hit hard by the increase in gasoline prices from.

Navistar also has a healthy business building military vehicles. Since 2006, the company has secured over $5 billion in government orders for military trucks and vehicles. Examples of contracts won is a $752 million contract to improve the Mine Resistant Ambush Protected (MRAP) vehicle.[2]


Company Overview

Business and Financial Metrics

NAV's net sales declined sharply in 2009. Between 2008 and 2009, NAV's total revenues declined from $14.7 billion in 2008 to $11.6 billion in 2009. However, despite this decrease in revenues, NAV's net income increased from $134 million in 2008 to $320 million in 2009. The company was able to increase its profitability in large part by cutting down on its expenses and thereby increasing its operating income.

Business Segments

Trucks (63.1% of 2009 Revenues)

Navistar's Truck Segment makes medium-duty and heavy-duty trucks and buses (Class 4 to 8). It is Navistar's largest business segment, accounting for 63.1% of consolidated net sales. [3] In 2009, this segment posted total sales of $7.3 billion.

Engine Segment (23.3% of 2009 Revenues)

The Engine Segment makes diesel engines used for the company's medium- and heavy-duty trucks and school buses. Navistar's products are sold mainly in North and South America and to other Original Equipment Manufacturers (OEMs) under the MaxxForce brand name. Navistar provides all of Ford's diesel-powered, super-duty trucks and vans. In 2009, this segment posted total revenues of $2.7 billion.[4]

Parts (18.8% of 2009 Revenues)

The Parts Segment provides engine parts to support the company's production of trucks, school buses and military vehicles, in addition to Navstar's OEM customers. In 2009, this segment posted total revenues of $2.2 billion.[5]

Financial Services (3.0% of 2009 Revenues)

Navistar's Financial Services Segment provides wholesale, retail and lease financing of products sold by Navistar and other truck manufacturers. This segment posted total revenues of $348 million in 2009.[6]

Trends and Forces

Navistar faces stringent government regulation regarding the environment and safety

Stricter governmental regulations on engine emissions in the US were released, increasing Navistar's cost of truck and engine production.[7] In addition, Navistar also faces strict noise and safety regulations. As these regulations become more stringent, Navistar's trucks and engines have to be emission- and noise- compliant to remain in business. As a result, Navistar has incurred increasing research and development costs and which has lowered the margin earned on sales. [8] In addition, the truck market anticipated the increasing prices due to stricter standards, pushing them to purchase trucks, buses and engines up to two years in advance. Overall, Navistar's sales declined 13% in 2007 as emission-compliant vehicles entered the market. [9]

The US government is becoming an increasingly significant customer.

Navistar has received over $5 billion in contract orders since 2006, primarily from the US Marine Corps and the US Army.[2] The company is the largest supplier of Mine Resistant Ambush Protected (MRAP) vehicles to the US military.[10] Navistar has been awarded several significant contracts to produce armored vehicles. In particular, the company won a $1.3 billion contract over several years, providing tactical vehicles for Afghanistan and Iraq in May.[2] Navistar also won a $752 million contract to produce a lighter MRAP vehicle.[2] The US government is one of Navistar's more stable customers. As it's share in Navistar's sales continues to increase, the stability in the company's sales increase as well. This is unlike Ford (currently Navistar's largest customer) which is subject to economic and market volatility.

Competition

Navistar has a number of major competitors in the US. Navistar competes with these OEMs in the production of medium- and heavy-duty trucks and buses, which account for about 60 percent of the company's sales. Competitors include Daimler AG (DAI), AB Volvo (VOLVY), and PACCAR (PCAR).

References

  1. NAV 10-K 2009 Item 1 Pg. 14
  2. 2.0 2.1 2.2 2.3 Navistar Defense Wins $752 Million Dollar Contract.
  3. NAV 10-K 2009 Item 7 Pg. 38
  4. NAV 10-K 2009 Item 7 Pg. 44
  5. NAV 10-K 2009 Item 7 Pg. 47
  6. NAV 10-K 2009 Item7 Pg. 48
  7. Navistar 2007 10-K: Item 1, page 6
  8. Navistar 2007 10-K: Item 1A, page 9
  9. Navistar 2007 10-K: Item 7, page 21
  10. www.wikipedia.com Navistar International
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