Navistar International Corp. (NAV) has upgraded its financial outlook for fiscal 2010 ended October 31, 2010. The upsurge was driven by a military truck order of $750 million, won by the company in February this year, to manufacture about a thousand Mine Resistant Ambush Protected (MRAP) vehicles for the Marine Corps.
The truck maker now expects to earn $198 million–$234 million or $2.75–$3.25 per share for the fiscal year. This is higher than the guidance to earn between $127 million and $163 million or between $1.75 per share and $2.25 per share, provided while presenting the first quarter of fiscal 2010 results last month.
In the first quarter, Navistar reported breakeven results before non-recurring items. This compared with the Zacks Consensus Estimate of a profit of 92 cents per share and a year-ago profit of $48 million or 67 cents per share, before non-recurring items. The decline in income was attributable to lower revenues due to a weaker demand for the company’s military vehicles. Revenue in the quarter fell 5% to $2.8 billion.
Based in Warrenville, Illinois, Navistar manufactures and markets commercial trucks, mid-range diesel engines, buses, military vehicles and chassis for motor homes and step-vans, and also provides service parts for various trucks and trailers. The company is one of the largest truck producers after Daimler AG (DAI) and PACCAR Inc. (PCAR).
The U.S. government is one of Navistar’s steadfast customers, a fact that provides stability to the company’s sales. The company continues to derive about 25% of its revenues from the U.S. government. Most of its existing U.S. government contracts extend over several years.
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