Shares of Navistar International Corp. (IW 1000/411) surged the most in more than three years after the truckmaker reported a surprise quarterly profit, its first since 2012, outweighing concerns as the company lowered its 2016 forecasts.
The shares gained 24% to $15.11 at 12:31 p.m. New York time after rising as much as 29%, the biggest intraday jump since March 2013.
The company posted fiscal second-quarter net income of $4 million, helped by cost cuts, while the average of analyst estimates compiled by Bloomberg was a $15.2 million loss.
The profit ended a 14-quarter streak of net losses and came amid a slump in demand for heavy-duty trucks. That downturn led Navistar to trim its full-year outlook for sales to $8.2 billion to $8.6 billion, from at least $9 billion, and for earnings before interest, taxes, depreciation and amortization to $550 million to $600 million, from a minimum of $600 million.
“We just completed an important quarter that shows the benefit of strong cost management as well as lean enterprise efforts and our ability to earn a profit despite industry headwinds,” CEO Troy Clarke told analysts.
“While the second half poses new challenges due to softening industry conditions, we are a resilient organization and we intend to deliver the best achievable results,” Clarke added.
Navistar said on June 7 that structural cost reductions in its first half reached $113 million and that, including savings from materials and manufacturing, expense cuts for the full year are on track to exceed its goal of $200 million.