Navistar 3Q profit falls; reviews business units

LISLE, Ill. (AP) ? Heavy truck and engine company Navistar International says that its third-quarter earnings fell from last year, which included a large tax benefit. The company also outlined a cost-cutting plan Thursday and said it is reviewing its noncore businesses.

This could mean that the company is considering selling some or all of those businesses. In addition, it is completing some voluntary buyouts and job cuts, but did not disclose how many jobs are being eliminated.

Navistar, whose CEO stepped down last week, earned $84 million, or $1.22 per share, for the three months ended July 31. That compares with $1.4 billion, or $18.24 per share, a year earlier.

The current quarter's results included a $196 million tax benefit as well as $16 million in engineering integration costs and $10 million for some penalties. The prior-year period included a $1.48 billion benefit as the company released part of its income tax valuation allowance.

Revenue dropped to $3.32 billion, down 6 percent from $3.54 billion. Navistar said that the performance was dragged down by lower sales in its U.S. and Canadian truck and engine segments mostly because of reduced military sales and lower engine volumes in South America.

Wall Street expected revenue of $3.03 billion.

Navistar said that the buyouts and job cuts are expected to result in $70 million to $80 million in annual savings. Navistar's overall goal is to cut costs by $150 million to $175 million year over year, beginning in fiscal 2013. A company representative could not be immediately reached for more information about the buyouts and job cuts.

The company is also boosting efforts to lower discretionary spending and lower its material costs further as part of its overall cost-cutting efforts.

Last week Daniel Ustian informed Navistar International Corp.'s board that he was immediately retiring from his roles as chairman, president and CEO, and that he was leaving the company's board. Ustian had been with the company for 37 years.

The Lisle, Ill., company named Lewis Campbell, the former chairman, president and CEO of Textron Inc., as its executive chairman and interim CEO.

Source: http://news.yahoo.com/navistar-3q-profit-falls-reviews-business-units-105451934--finance.html

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