QUOTE AND NEWS
Automotive World  Jul 17  Comment 
Navistar International Corporation (NYSE: NAV) announced today that Samara Strycker will join the company on August 4 as Senior Vice President and Corporate Controller. Strycker will replace Richard Tarapchak, who is leaving Navistar to...
Automotive World  Jul 15  Comment 
Navistar, Inc. announced today that it has started customer shipments of its first International® DuraStar® and International® WorkStar® vehicles with the company’s 9- and 10-liter engines with Selective Catalytic Reduction (SCR) emissions...
Motley Fool  Jul 4  Comment 
Market share is the best indicator of sustainable competitive advantages. Paccar has proven that it is among the best in the heavy-duty market, having expanded its market share during the past decade.
Automotive World  Jun 25  Comment 
Navistar, Inc. today announced its International® ProStar® linehaul and regional haul tractors are now available with the company’s 13-liter engine and Eaton Fuller Advantage™ Series Automated 10-speed transmission. The new ProStar...
Wall Street Journal  Jun 24  Comment 
Navistar said its so-called poison pill will be replaced by a plan intended to protect the use of certain tax assets.
Market Intelligence Center  Jun 17  Comment 
After closing Monday at $37.70, Navistar International Corp. (NAV) presents an attractive opportunity to get a 8.19% return in just 123 days, which is an annualized return of 24.30% (for comparison purposes only). To enter this trade, sell one...
Automotive World  Jun 10  Comment 
Navistar’s biggest growth opportunity is in Global Operations, says the division’s President, Eric Tech The post MWM is not for sale, says Navistar appeared first on Automotive World.
Automotive World  Jun 6  Comment 
Continued weakness in Brazil threatens to overshadow much of the progress Navistar is making. The post Navistar on navigating downturn in Brazil appeared first on Automotive World.
Wall Street Journal  Jun 5  Comment 
Navistar International, which has posted a stretch of quarterly losses, reports a quarterly loss of $297 million.
SeekingAlpha  Jun 5  Comment 
Navistar International (NAV) Q2 2014 Results Earnings Conference Call June 5, 2014, 9:00 a.m. ET Executives Heather Kos - Vice President, Investor Relations Troy Clarke - President and CEO Walter Borst - CFO John Allen - COO ...




 

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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