Heavy Duty Trucking

SEP 2014

The Fleet Business Authority

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Trucking's Most Respected Business Report 28 HDT • SEPTEMBER 2014 www.truckinginfo.com A lthough its market share is not increasing as rapidly as it had expected, Navistar has made significant progress in cutting its warranty spend and other costs, and as a result posted a positive income number in its fiscal third quarter, despite lower sales than anticipated. The company reported a net loss of $2 million, or 2 cents per share, on revenues of $2.8 billion. That compares to a loss of $247 million, or $3.06 per share, a year ago. However, company officials are emphasizing the fact that the company achieved quarterly income from con- tinuing operations before income taxes for the first time since 2011, reporting $21 million — that compares to a $211 million loss in the same period last year. This is on revenue that was es- sentially flat compared to the third quarter last year. The company has upped its industry forecast for truck sales, even as it remains behind in its market share targets. The company's initial prediction for Class 6-8 and bus industry sales in the U.S. and Canada for 2014 was 300,000-335,000, but now it's projecting that number to be 330,000-340,000. Officials just would like to have a bigger part of that pie. The company initially projected a 21% Class 6-8 market share for this year, up from 2013's 18%. The actual numbers were 20% for Class 6 and 7 and 14% for Class 8. Medium-duty was down from 24% a year ago and Class 8 remained the same year over year. "Clearly we're not where we had anticipated being" as far as market share, said Jack Allen, executive vice president and chief operating officer, in an investor conference call. "I think a lot of that has to do with custom- ers wanting to gain experience with our new [selective catalytic reduction] products before they increase the per- centage of their buy in our favor." – Deborah Lockridge, Editor in Chief hotline Intermodal's busy summer Has Navistar turned the corner? Navistar started customer shipments in July of the first International DuraStar and Work- Star trucks with selective catalytic reduction emissions technology. The Georgia Ports Authority reported that the Port of Savannah handled a record among of container cargo in July, moving 293,889 twenty-foot equivalent container units at Savannah's Garden City Terminal, a 19.2% increase over the previous year. It was just a sampling of the busy intermodal traffic story seen across the country over the summer, with the American Association of Railroads reporting that U.S. intermodal volumes were up 8% in May, 7% in June, and 5% in July compared to last year. The Intermodal Association of North America reported that the second quarter saw the largest quarterly intermodal growth since 2011. Intermodal freight posted gains across all segments. International containers increased 9.6%, trailers improved by 4.3%, and domestic containers grew 7.6% quarter-over-quarter. "The second quarter results were indica- tive of a rebounding economy and higher than predicted import shipments," said Joni Casey, president and CEO of IANA. "It is also probable the harsh winter that re- sulted in constricted first quarter capacity contributed to the second quarter's strong growth, by comparison." Second Quarter 2014 Intermodal Volume Comparisons 5,000,000 4,000,000 3,000,000 2,000,000 1,000,000 0 4.3% 7.6% 6.9% 9.6% 8.2% 1,518,085 1,632,802 1,915,334 2,047,159 1,940,247 2,126,170 3,855,581 4,173,329 397,249 414,357 Trailers Domestic containers All domestic equipment ISO containers Total 2013 2014 PHOTO: NAVISTAR GRAPH: INTERMODAL ASSOCIATION OF NORTH AMERICA

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