The supply-chain struggles that have hindered Navistar’s operations across North America look to be ending, the finance chief of parent company Traton SE told analysts March 5.
Michael Jackstein said Navistar’s ongoing issues in procuring frame rails have been “more or less resolved” and added that the OEM’s supply of axles is also improving. The company’s first-quarter results might still show some lingering impacts, Jackstein said, but should normalize as 2024 progresses.
Still, the Traton team led by CEO Christian Levin isn’t signaling the all-clear just yet and continues to restrict the number of orders Navistar will accept. The company order book still stretches out more than six months, Levin said, and lead times are still too long to bring on more business without compromising the company’s ability to meet its delivery promises.
“It’s a little bit like the movie we saw in Europe in 2021 and 2022,” Levin said on a conference call discussing Traton’s fourth-quarter results. “The team is doing a great job there. We are also supporting the colleagues at Navistar with our experts from both Latin America and Europe to help them get back on track.”
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Navistar in 2022 began making International medium-duty trucks at a new San Antonio plant—plans call for it to add heavy-duty vehicles there, too—and also runs a powertrain manufacturing facility in Huntsville, Alabama, among other facilities. The company sold a little more than 17,800 units in the fourth quarter, down from nearly 18,900 in Q3 and about 18,500 in late 2022. For the year, unit sales rose 9% to about 75,500.
Those 17,800 Q4 sales, coupled with nearly 2,900 bus sales, translated into revenues of roughly $2.9 billion, which was down about 6% year over year. Navistar’s operating profit margin came in at 7.0%, up solidly from 5.9% in late 2022, and lifted the division’s full-year operating profits to nearly $800 million and its margin to 6.6%.
As with peer OEM Daimler Truck North America, those numbers benefited from better pricing but were held back a bit by higher components and raw material prices, as well as the supply-chain snarls.
For 2024, Levin, Jackstein, and their team—who also run Volkswagen Truck and Bus, Scania, and MAN worldwide—forecast sales to range from 5% below to 10% above 2023’s $49.6 billion total. Despite that “more challenging market environment,” they plan to ramp up capital, research, and development spending to prepare for further electrification and advance other strategic priorities.
The Frankfurt-listed shares of Traton (Ticker: TRATF) climbed 7% on March 5 on the company’s earnings report and outlook. They are up more than 40% over the past six months, growing the company’s market capitalization to about $15.3 billion.
