DETROIT (Reuters) - U.S. truck maker Navistar International Corp (NAV.N) on Tuesday reported a much wider-than-expected quarterly loss on continued industry weakness but said its new product line positioned it well for an expected market rebound in the second half of 2017.
Once a leading maker of truck engines, Navistar is trying to turn itself around after struggling with a costly and unsuccessful smog-reduction system that did not meet regulatory standards.
Last week Volkswagen AG’s (VOWG_p.DE) trucking business completed a $256 million equity investment in Navistar for a 16.6 percent stake. Some analysts see the move as a precursor of a complete takeover of the struggling truck maker and its large U.S. dealer network.
The investment will also provide Navistar with access to VW technology.
“This marks an exciting new chapter in Navistar’s history, and another step in our journey to becoming a stronger, more profitable company,” Chief Executive Officer Troy Clarke said in a statement on Tuesday.
Lisle, Illinois-based Navistar’s wider loss comes during a recent industrywide improvement in orders, which have been weak as a lackluster economy led trucking companies to sit on the sidelines.
U.S. heavy-duty, or Class 8, truck orders were up in January and February from a year earlier, which should mean higher revenue for truck makers in the months to come.
Navistar said its loss widened to $62 million, or 76 cents per share, in the first quarter ended on Jan. 31 from $33 million, or 40 cents per share, a year earlier.
Analysts on average had expected a loss of 45 cents per share, according to Thomson Reuters I/B/E/S.
Revenue fell to just below $1.7 billion from almost $1.8 billion. Analysts had expected $1.7 billion.
This was the company’s eighth consecutive decline in quarterly revenue.
Navistar, which also makes school buses and dump trucks, said its cash on hand had decreased to $573 million from $804 million three months earlier.
Editing by Jason Neely and Lisa Von Ahn