QUOTE AND NEWS
Market Intelligence Center  Apr 1  Comment 
Tuesday’s trading in Navistar International Corp. (NAV) gives options traders an opportunity for a 5.88% return. By selling the Jul. '15 $29.00 call and buying the Jan. '16 call at the $20.00 level for a net debit of $8.50, traders will book a...
Market Intelligence Center  Mar 26  Comment 
The patented option-trade picking algorithms that power MarketIntelligenceCenter.com's Artificial Intelligence Center  are highlighting two trades on Navistar International Corp. (NAV) today after it closed at $28.50 on Wednesday. For more...
Benzinga  Mar 18  Comment 
In a report published Wednesday, Morgan Stanley analyst Nicole DeBlase downgraded the rating on Navistar International Corp. (NYSE: NAV) from Equal-Weight to Underweight, and lowered the price target from $26.00 to $20.00. In the report, Morgan...
TheStreet.com  Mar 18  Comment 
NEW YORK (TheStreet) -- RATINGS CHANGES American International Group was downgraded to hold at TheStreet Ratings. You can view the full analysis from the report here: AIG Ratings Report. Knowles was initiated with a sell rating at...
Automotive World  Mar 10  Comment 
Kari Rihm, President, CEO, Rihm Kenworth Receives the Fifth Annual Influential Woman in Trucking Award Navistar and the Women In Trucking Association (WIT) today presented the fifth annual Influential Woman in Trucking award to Kari Rihm,...
Market Intelligence Center  Mar 6  Comment 
For a hedged play on Navistar International Corp. (NAV) MarketIntelligenceCenter.com’s patented trade-picking algorithms selected a Jul. '15 $30.00 covered call for a net debit in the $27.50 area. That is also the break-even stock price for the...
TheStreet.com  Mar 6  Comment 
  NEW YORK (TheDeal) -- Navistar International long stuck in the slow lane following a disastrous bet on new engine technology, is increasingly showing signs that the worst is behind it. And it is quite possible the truck maker won't...
Market Intelligence Center  Mar 4  Comment 
Navistar International Corp. (NAV) presents a trading opportunity that offers a 9.97% return in just 135 days. A covered call on Navistar at the $29.00 level expiring on Jul. '15 offers an assigned return rate of 9.97% or 26.97% annualized. This...




 

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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