Zacks_Analysts' Blog : Navistar Gets Army Order - Analyst Blog

Navistar International Corp. (NAV) recently received orders worth $97 million from the U.S. Army TACOM Life Cycle Management Command for vehicles and other supplies for use in Afghanistan. The deliveries are scheduled for the fall of 2011 and completion by the fall of 2012. Only RPG nets will be delivered by summer 2011

The delivery orders include 265 general troop transport vehicles, 160 buses and 829 rocket propelled grenade (RPG) net kits for International MaxxPro Mine Resistant Ambush Protected (MRAP) units, who are actively working in Afghanistan.

General troop transport vehicles, which are used to serve the Afghan National Police and Afghan National Army security missions, will be produced in two of the company’s facilities, one in Texas and the other in Mississippi. The production of buses, used for the transportation of troops and equipment, will take place at the Okla facility.

The continuous success of the U.S. troops in Afghanistan has raised the constant need for proper training, equipment and support to the security forces based in the region. This has significantly raised demand for Navistar vehicles, thereby strengthening the company’s financials. Going forward, Navistar plans to introduce a wide range of vehicles, services and parts, especially to support the country’s security mission in the face of growing terror threats worldwide.

During the first quarter of fiscal 2011, Navistar earned a profit of $12 million or 16 cents per share compared with the year-ago profit of only $2 million or 3 cents per share. The remarkable improvement in income was attributable to increased orders and enhanced productivity. However a substantial drop in engine production reduced revenue generation by 2% to $2.74 billion.

For full fiscal 2011, the company projects its net income to range between $388 million ($5.00 per share) and $465 ($6.00 per share), excluding transition costs associated with the integration of the truck and engine engineering operation. Besides, its military business has set a goal of $2 billion of revenues, particularly because of strong demand in Navistar Defense.