Navistar Loss Widens, Receives Subpoena From Defense Department

Navistar International Corp. reported a wider loss in its third quarter as the company continues to face declining heavy duty truck sales.

The company also said in a regulatory filing that its defense unit received a subpoena during the quarter from the U.S. Defense Department Inspector General. The subpoena was related to Navistar's independent suspension systems for military vehicles sold to the government in 2009 and 2010. Navistar said it had submitted documents in response and intends to fully comply with the subpoena.

Shares fell 3.6% in premarket trading.

On Tuesday, Volkswagen AG said it would take a minority stake in Navistar to broaden the German auto maker's U.S. footprint while expanding its global truck-market operations. VW plans to invest $256 million in Navistar for a 16.6% stake in the company. It will also have the right to appoint two directors to Navistar's board.

The Lisle, Ill., truck producer on Thursday said results in the quarter were hurt by tougher industry conditions, as trucking companies are opting to buy fewer vehicles amid soft demand for hauling freight. Still, the company reaffirmed its guidance for the year.

Revenue declined across its segments with truck sales falling 24% to $1.4 billion as parts revenue fell 4.5% to $597 million.

Costs and expenses fell 18% from a year earlier.

For the three months ended July 31, Navistar reported a loss of $34 million, or 42 cents a share, compared with a year-earlier loss of $28 million, or 34 cents a share. Revenue slipped 18% to $2.09 billion.

Analysts had expected a loss of 14 cents a share on revenue of $2.18 billion.

Write to Austen Hufford at [e-mail]

(END) Dow Jones Newswires

September 08, 2016 09:15 ET (13:15 GMT)

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