Revenues in the quarter were $2.4 billion, a 28% increase compared to $1.9 billion in the first quarter last year. The revenue increase was driven by a 50% increase in the company’s Core volumes, which represent its sales of Class 6-8 trucks and buses in the United States and Canada.
First quarter 2019 EBITDA was $96 million, compared to first quarter 2018 EBITDA of $55 million. Adjusted EBITDA was $173 million versus $104 million in first quarter 2018. Results were impacted by certain one-time items, including a non-cash charge related to a Canadian pension annuity transaction of $142 million (or $104 million after-tax), and aggregate gains of $59 million from the sales of 70% of the Navistar Defense business and the company’s ownership interest in the JND joint venture.
Navistar finished the first quarter 2019 with $1.24 billion in consolidated cash, cash equivalents and marketable securities and $1.19 billion in manufacturing cash, cash equivalents and marketable securities.
“We had our best first quarter since 2010 as customer acceptance of our new products translated to extended gains in our Core market share,” said Troy A. Clarke, Chairman, President and CEO. “In addition to our ongoing growth in Class 8, our medium-duty market share grew by six points during the quarter, the largest year-over-year medium share gain in the industry.”
The Financial Services segment net revenues increased to $74 million in Q1/2019, primarily due to higher interest rates and greater average portfolio balances in the U.S. and Mexico. Segment profit increased 55% to $31 million, primarily due to higher interest margin from improved funding strategies and income from an intercompany loan. The increase was partially offset by increased depreciation expense on operating leases.
The company reported backlog growth of more than 8,000 units in its core markets, up 18% since the end of fourth quarter 2018.
Navistar also entered a service partnership agreement with Love’s Travel Stops, which adds more than 315 Love’s Truck Tire Care and Speedco locations to the International service network, creating the commercial transportation industry’s largest service network. This partnership will expand customers’ access to same-day service for a wide array of light mechanical repairs and increased repair velocity, so more customers can get their trucks repaired the same day.
The company reiterated its 2019 industry guidance and raised the following financial guidance:
Industry retail deliveries of Class 6-8 trucks and buses in the United States and Canada are forecast to be 395,000 to 425,000 units, with Class 8 retail deliveries of 265,000 to 295,000 units.
Revenues are expected to be between $10.75 billion and $11.25 billion.
Adjusted EBITDA is expected to be between $850 million and $900 million.
Navistar International is a holding company whose subsidiaries and affiliates produce International brand commercial and military trucks, proprietary diesel engines, and IC Bus brand school and commercial buses. An affiliate offers financing services.
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