NEW YORK -- Navistar International Corp., which makes trucks and school buses, reported higher quarterly earnings on Thursday and raised its full-year profit forecast, sending shares 2.8 percent higher in early trading.
Second-quarter net income rose to $53 million, or 70 cents a share, from $52 million, or 68 cents a share, a year earlier. Revenue rose 25 percent to $3 billion. The company cited favorable market conditions and stable steel prices.
Analysts on average had expected a profit of 71 cents a share on revenue of $2.6 billion, according to Reuters Estimates.
Looking forward, Navistar said it sees third-quarter profits in a range of 75 cents to 85 cents per share, the first time it has given guidance for the three months ending July 31. It also raised its full-year earnings forecast to a range of $4.80 to $5.10 per share, from an earlier forecast of $4.60 to $5 per share. Analysts on average expect profit $4.68 per share.
The company also said retail sales volume in the United States and Canada would be 5 percent higher than it estimated in December. It sees sales of Class 6-8 trucks and school buses totaling 408,000, citing a favorable economic environment for the increases. Classes refer to the weight of a truck.
"They are taking Class-8 market share from companies like Freightliner." said analyst Brian Rayle of FTN Midwest Securities, who said the higher full-year guidance was not a surprise. "Their truck margins have improved, their engine margins need to improve to provide further upside."
The Warrenville, Illinois-based company said steel price increases were stabilizing and it expects accelerated earnings gains in the second half of the year, especially the fourth-quarter, traditionally the company's strongest.