QUOTE AND NEWS
Automotive World  Jul 15  Comment 
IC Bus today announced it will fulfill an order by the Indianapolis Public Schools of 100 CE Series school buses, powered by the Power Solutions International (PSI) 8.8-liter LP propane engine. The buses will be delivered by the IC Bus dealer,...
Benzinga  Jun 28  Comment 
Navistar International Corp(NYSE: NAV) is mostly out of the woods, but the macro environment won't cooperate. Piper Jaffray's Alexander Potter downgraded the company to Neutral and cut his price target from $14.00 to $11.50. Navistar has...
Automotive World  Jun 20  Comment 
Symbolizing Navistar’s commitment to customer uptime, technicians from Arizona, New Mexico and Florida triumphed in two recent competitions testing the skills and speed of service professionals from the company’s dealer networks. Nathan...
Automotive World  Jun 20  Comment 
Voith Industrial Services in Mexico has obtained a contract renewal for 3 more years at Navistar International Corporation in Escobedo, Mexico. One of the company’s concerns is the manufacturer of International brand commercial trucks and...
Benzinga  Jun 15  Comment 
Avondale Partners sees continued headwinds for Navistar International Corp (NYSE: NAV) in the second half of 2016 and into 2017, despite the truck maker recording its first quarterly profit since the third quarter of 2012. "The cost cutting...
Automotive World  Jun 14  Comment 
Navistar, Inc. today is pleased to announce Carlos Junquera as Vice President of Sales, North America Parts. Junquera will be responsible for the leadership of the North American Parts sales team, cultivating existing relationships with...
Motley Fool  Jun 14  Comment 
Questions about whether or not Navistar International Corp can make money in 2016 are hurting the stock today.
Forbes  Jun 13  Comment 
Navistar's open architecture promises to make the benefits of big data analytics available to fleet operators. It's innovating four core ways to put that flood of information to work.
Automotive World  Jun 10  Comment 
BY OLIVER DIXON. Thoughts on the GM-Navistar chassis-cowl production deal The post COMMENT: GM deal sees Navistar shed pounds (after gaining dollars) appeared first on Automotive World.
Automotive World  Jun 9  Comment 
“We’re very pleased to partner with GM on this important manufacturing opportunity,” said Persio Lisboa, president, Navistar operations. “Our Springfield plant is an important part of our manufacturing footprint, and we’ve been...




 

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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