According to Reuters,
Navistar International Corporation
) is planning to reduce headcount through a voluntary separation
program. The company may also undertake an involuntary reduction of
workforce to accomplish the goal.
Navistar is providing an opportunity for most of the U.S.-based
non-represented salaried employees to apply for the voluntary
separation program. However, the company could not spell out the
exact amount of expenses involved in the workforce reduction
program at this stage.
Navistar is developing the next-generation clean engine system -
In-Cylinder Technology Plus (ICT+) - to meet the 2010 U.S.
Environmental Protection Agency (EPA) emissions standards. To lay
emphasis on the new technology, the company is even considering to
eliminate certain programs and projects.
The company recorded a loss of $137 million or $1.99 per share
(excluding special items) in second-quarter 2012. The results also
missed the Zacks Consensus Estimate of earnings of 67 cents per
Revenues dipped 2.9% year over year to $3.3 billion, missing the
Zacks Consensus Estimate. The decline was attributable to a
decrease in sales in the Engine and Part segment, which was partly
offset by higher sales in the Truck segment.
Warrenville, Illinois-based Navistar manufactures and sells
commercial trucks, mid-range diesel engines, buses, military
vehicles and chassis for motor homes and step-vans. It also
provides service parts for various trucks and trailers. The
company's U.S. controlled domestic competitors include
Ford Motor Co.
Currently, Navistar retains a Zacks #4 Rank, which translates into
a short-term (1 to 3 months) Sell rating. The company faces
difficulty in obtaining smooth supply of materials due to its over
dependence on a few suppliers.
In addition, strict regulation by the government also creates
pressure on the company as it generates most of its revenues from
services rendered to the government. We have a long-term (more than
6 months) Underperform recommendation on the stock.
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