Navistar International on Wednesday reported a fiscal third-quarter net loss of $28 million, or 34 cents per share, hurt by lower export sales of trucks and parts and continued efforts to restructure its business.
A year ago, the company’s loss totaled $2 million, or 2 cents a share.
The quarter included charges of $13 million related to cost reductions, including an unspecified number of layoffs in the U.S. and Brazil. In the year-ago period, the company recorded a $16 million restructuring charge, but that one was primarily tied to the 2011 closing of a plant in Canada.
The earnings report came a day after the Securities and Exchange Commission announced that Navistar had been ordered by a court to turn over a second set of documents related to an ongoing fraud investigation, papers that Navistar has withheld or redacted on grounds that they contain privileged information.
In releasing its results, the Lisle-based company said it continues to evaluate its portfolio, with an eye toward either closing or selling non-core businesses and cutting costs by restructuring its business and making its manufacturing operations more efficient.
“U.S. and Canada core truck performance was driven by steady and improving sales in medium, bus and severe service segments, where we are on track to achieve our full-year market share goals,” Troy Clarke, Navistar president and CEO, told analysts during an earnings call, adding, “the economic turmoil in Brazil continues to depress truck and engine sales.”
Clarke said that despite several years of cost cutting at Navistar, a benchmarking study of its North American operations shows “there is more we can do.” Though he gave few details where Navistar would next look to trim fat, he said a new approach to manufacturing, where individual factories will focus on single-model platforms, rather than a more flexible approach, will help reduce costs.
Third-quarter sales fell 11 percent from a year ago, to $2.5 billion. Net sales in its truck segment declined 8 percent, to $1.8 billion.
Since 2012, the SEC has been investigating whether Navistar violated federal securities laws by making false or misleading statements as it sought approval for new engine technology from the U.S. Environmental Protection Agency. SEC investigators allege that Navistar put “political pressure” on the EPA to certify the technology.
The project cost Navistar more than $700 million and ultimately failed because the technology did not pass 2010 federal emissions standards.
The SEC sought to have a U.S. magistrate overrule Navistar’s privilege claims regarding the papers, documents that the commission alleged involved lobbying and communications firms used by Navistar, communications among non-attorneys and draft documents.
In late June, the court overruled Navistar’s claims of privilege for 46 of the documents in their entirety and portions of another 16 documents. The court also ordered Navistar to turn over other documents that the company did not think would be privileged, based on the court ruling. While Navistar did that, the SEC said there were 13 additional documents redacted on the grounds of privilege, so the commission asked the court for another ruling.
In the decision, posted by the SEC on its website Tuesday, the court overruled Navistar’s privilege claim for five of the 13 documents entirely and in part on three of the documents.
The SEC said its investigation is continuing.
