Navistar Posts Big Jump In Q2 Earnings With Help From TuSimple

Navistar International Corp. NAV reported a big jump in its Q2 fiscal-year earnings due in part to gains on its investment in autonomous trucking software startup TuSimple Holdings.

Navistar and TuSimple TSP are working together to bring a Class 8 high-autonomy truck to market in 2024. 

Adjusted net income was $72 million, or 72 cents per fully diluted share, nearly twice a consensus of analysts compiled by investor site Seeking Alpha. Navistar reported an adjusted net loss of $10 million, or negative 10 cents, in the February-April quarter a year ago. Revenues in the quarter were $2.2 billion, compared to $1.9 billion in the second quarter last year.

Second-quarter 2021 adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) was $198 million, or 9.2% of revenue compared to year-ago EBITDA of $88 million or 4.6% of revenue.

"We delivered strong operating results in our second quarter," Persio Lisboa, Navistar CEO, said in a press release. "The strong trucking industry, fueled by robust economic growth, is supporting higher-order activity by our customers and our team is working hard to overcome the supply chain challenges to best support their transportation needs."

Gains And Charges

Navistar's truck segment reported a net profit of $189 million compared to a loss of $51 million in the year-ago quarter when the pandemic led to weeks of manufacturing shutdowns. Navistar's 10% investment in TuSimple resulted in a gain when the startup went public in April. 

The gains were partially offset by the $50 million settlement in a whistleblower case involving falsified invoices to the U.S. Marines for truck suspension and components, and higher warranty costs that included a second recall for connector rod defects in Class 8 trucks recalled a year ago.

Truck and bus deliveries also grew with 13,900 trucks and buses sold in the quarter. Navistar added a second production shift at its plant in Escobedo, Mexico.

Parts sales grew 18% in the quarter to $135 million, up 31% year over year. Financial Services' revenue fell to $50 million from $64 million, and profits of $15 million compared unfavorably to $24 million a year ago. 

Navistar expects its $3.7 billion merger with Volkswagen AG's TRATON Group to close by midyear.

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