Revenue for Navistar International dropped 36 percent in its second quarter to $1.9 billion, compared to $2.9 billion in 2019. The decrease was primarily driven by the impact of the coronavirus, the company said, which resulted in lower volumes in its core market of vocational trucks and buses.
It reported a net loss for the quarter of $38 million, compared to $48 million in Q2 2019.
"Like a number of businesses, our company has been impacted by the Covid-19 pandemic and that is reflected in our results," said Troy A. Clarke, chairman, president, and CEO, in a prepared statement.
During the quarter, the company took several actions to position itself in response to the global pandemic. In April, the company announced a series of actions to conserve over $300 million of cash for the year, without jeopardizing its strategic plans. The actions include savings from provisions of the CARES Act, postponing capital expenditures and spending, and deferring the base salary of U.S. based exempt, nonrepresented employees. Also in April, the company completed the issuance of $600 million senior secured notes.
"We are focused on preserving cash and reducing cost, but not at the risk of sacrificing our future," said Walter Borst, CFO, in a statement. "We remain steadfast in pursuing Navistar 4.0, and while some programs and expenditures have been delayed, they have not been cancelled. It's important that we continue to invest in our company, even in these difficult times, to ensure our long-term success."
Navistar said its facilities have largely remained in operation throughout the quarter. Its production facilities have experienced limited disruptions that can be measured in weeks as opposed to months due mostly to supplier work stoppages. Its parts distribution centers have remained open throughout the quarter with only minor changes to hours of operation. The company's dealer network has also continued to operate. In maintaining operation, the company has strictly followed CDC recommendations to prevent the spread of the coronavirus, taking extensive measures to ensure the health and safety of its employees and their communities.
"As an essential business, we took early actions to protect our people so that we could fulfill our duty to keep our assembly plants running and parts distribution centers in operation to serve our customers and dealers who are keeping the economy moving by delivering essential goods and services to our communities," said Persio Lisboa, COO. "Throughout the quarter, we have worked closely with our suppliers to overcome significant disruptions to the flow of parts to our facilities and have been moderately successful in maintaining operations."