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WARRENVILLE, Ill., Aug 16 (Reuters) - Truck maker Navistar International Corp. reported on Friday its third straight quarterly loss due to soft demand and a labor strike, and predicted another down quarter before profits return.
The company had a loss in the fiscal third quarter ended July 31 of $16 million, or 27 cents a share, compared with a profit of $2 million, or 3 cents a share, a year earlier.
Navistar also said it could post a loss of 20 to 25 cents a share from continuing operations in the fourth quarter as demand for trucks remains weak.
Analysts had expected a loss of 28 cents a share in the third quarter but a profit of 36 cents in the fourth quarter, according to Thomson First Call.
Navistar shares were off $2.58, or 10 percent, at $22.50 in early trading on the New York Stock Exchange.
Navistar also said it may post a fourth-quarter restructuring charge as it looks for further cost reductions and closes a body plant in Springfield, Ohio, and an assembly line at a second plant there.
But the company said it expects to be profitable for the full-year 2003 even if truck demand does not rebound next year.
"We need to continue our focus to take costs out of our operations so that we have a flexible cost structure and which will make us a stronger, much more profitable company at any part of the cycle," Navistar Chairman and Chief Executive John Horne said in a prepared statement.
Sales and revenue for the quarter were little changed at $1.6 billion.
When a six-week strike at its main heavy-duty truck plant in Chatham, Ontario, ended in mid-July, Navistar predicted a third-quarter loss of between 25 cents and 30 cents a share.
The Warrenville, Illinois-based company said unusual and one-time items in the third quarter totaled $30 million pretax, or 31 cents per share after taxes. Further cutting into profits were costs from a product recall and an engine shortage at a supplier that was due to a surge in demand for engines that predate the Oct. 1 deadline for meeting new federal emissions standards.
The company lowered its industry forecast for medium trucks to 97,500 from 101,500 for the year ending Oct. 31.
Navistar, which is also the nation's largest school bus manufacturer, said bus demand was unchanged at 26,000 units and its forecast for Class 8 heavy-duty trucks remained at 156,000 units.
Truck manufacturers including Navistar have enjoyed a surge in demand for heavy trucks as fleet operators accelerated buying plans to beat an Oct. 1 deadline for new diesel engines that meet tougher U.S. pollution standards.
Navistar, which increased production at its Chatham heavy truck plant to meet the demand, also warned that up to 500 workers at the facility could face layoffs after Nov. 1 because of an expected slowdown in orders in early 2003.
The company said weaker demand for medium trucks was due to a reluctance by leasing companies to commit to new orders until there are clearer signs of economic recovery.
Navistar is now negotiating a new U.S. labor contract to cover about 7,400 members of the United Auto Workers union at plants in Springfield, Indianapolis, Fort Wayne, Indiana, and Melrose Park, Illinois, in addition to various parts distribution centers across the country.
Horne said the company wants an affordable cost structure that includes production flexibility and manageable health care costs.