Actionable news
All posts from Actionable news

Navistar International jumped 19.6% on a surprise Q2 profit

Navistar International (NAV), a truck and engine maker, reported an unexpected quarterly profit, its first since 2012, amid cost-cutting measures.

The company reported Q2 net income of $4 million, or $0.05 per diluted share, up from a loss of $64 million, or $0.78 a share, during the same quarter last year. Revenues dropped to $2.2 billion from $2.69 billion due to declining sales in the US and Canada, but still beat estimates from Capital IQ of $2.18 billion.

The company said in a report Tuesday it slashed $56 million in costs during the second quarter, bringing total cuts to $113 million in the first six months of the fiscal year. Navistar is on track to exceed its total cost reduction goal of $200 million this year, according to the report.

"For the first time since we launched our turnaround more than three years ago, Navistar reported a quarterly profit," Chief Executive Troy A. Clarke said. "Our performance this quarter begins to demonstrate the earnings potential of this company."

Still, Navistar slashed its full-year 2016 revenue guidance as slowing sales of large, or Class 8, trucks will hurt sales for the rest of the year. Revenues are now seen in a range of $8.2 billion to $8.6 billion from prior forecasts for $9 billion to $9.25 billion. Analysts had been expecting revenue of $8.83 billion.

Cost cutting is of course, a positive development, but we have revenue and sales decline. imho, 20% jump is unfounded and the stock is a good candidate for going short.