Truck sales boost profits for Navistar, Eaton

April 15, 2005
Truck sales boost profits for Navistar, Eaton

Navistar International Corp. has announced that its first-quarter earnings totaled $20 million, turning around the $14 million loss it posted for the same period last year.

Daniel C. Ustian, Navistar chairman, president & CEO, said 1Q results reflect volume improvements tied to strong industry demand and “substantially” higher heavy-truck market share than in the first quarter of 2004.

However, supplier shortages are continuing to dog the OEM. According to the OEM, tight component supplies may cap Navistar’s production. However, Ustian said, suppliers have reassured Navistar that shortages should not be excessive by the end of the second quarter.

"We anticipate that our overall market share will grow in 2005 and that our earnings will be greater in 2005 than if we had cut production as some of our competitors have done to address the supply issues," Ustian said. "Our Class 8 market share in the first quarter rose to 19.1% from 15.5% in the first quarter a year ago."

Diversified industrial manufacturer Eaton Corp. has announced that its net income increased 40% to $187 million over the first quarter of 2004. Sales in the quarter were a record $2.65 billion, 19%t above the same period in 2004.

Eaton’s truck segment posted sales of $542 million in the first quarter, up 42% compared year-over-year, and recorded operating profits of $109 million, up 79%. NAFTA heavy-duty truck production was up 46% compared to 2004, NAFTA medium-duty truck production was up 10%, European truck production was up 8%, and Brazilian vehicle production was up 10%.

"First-quarter production of NAFTA heavy-duty trucks totaled 82,000 units, 5% more than in the fourth quarter of 2004," said Alexander M. Cutler, Eaton chairman & CEO. "Orders for NAFTA heavy-duty trucks during the first quarter averaged 30,000 units per month and the backlog at the end of March is estimated to be 190,000 units. We estimate the NAFTA heavy-duty truck market in 2005 is likely to total at least 310,000 units.”

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