International Motors Q3 Profit Almost Doubles as Sales Soar
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Profits at International Motors almost doubled year on year in the third quarter of 2024 as the original equipment manufacturer cleared a delivery backlog caused by a second-quarter fire at a mirror supplier, with truck sales jumping more than 40%.
International posted an adjusted Q3 operating profit in of $414.4 million, up 89.6% compared with $218.6 million in the same period 12 months earlier, parent company Traton said Oct. 28. Traton reports all earnings in euros and all conversions were correct as of Oct. 28.
Munich-based Traton, the truck and bus division of automaker Volkswagen, saw its own profits jump on the back of the improved performance at International, reporting an adjusted operating result in Q3 of $1.23 billion, up 19.4% compared with $1.033 billion in the same period 12 months earlier.
International Motors was known as Navistar until a rebrand at the end of September. Along with International Trucks, it is also the parent company of school bus builder IC Bus.
TRATON Analyst_Investor Presentation Q3_9M 2024
Revenue for Q3 truck and bus sales for International totaled $3.87 billion, up 28.8% from $3.01 billion in the year-ago period.
Parent company Traton’s sales revenue in the most recent quarter totaled $12.84 billion, up 4.9% from $12.25 billion a year earlier.
Inclusive of buses and trucks, International sold 31,460 vehicles in Q3, a jump of 40.5% compared with 22,385 sold in the same period 12 months previous. Specific to commercial trucks, the Lisle, Ill.-based manufacturer sold 27,281 units during the quarter, a jump of 44.6% compared with 18,873 sold in the same period a year earlier.
Levin
Nearly 40% of Traton’s Q3 deliveries were at International, versus around 20% in the second quarter, Traton CEO Christian Levin said during the company’s quarterly earnings call. The typical level is around 30%, he told analysts.
International’s adjusted return on sales in the most recent quarter was 10.7% after slumping to 2.7% in Q2, said Levin, leading to a 1.2 percentage point year-on-year increase in Traton’s overall ROS to 9.6%.
Through the first nine months of 2024, International’s ROS was 6.8%, compared with 6.5% in the year-ago period.
International’s orders in the most recent quarter totaled 15,396 vehicles, down 6.1% compared with 16,400 vehicles in the year-ago period.
The company’s truck orders in the most recent quarter totaled 11,795 units, down 14.4% compared with 13,784 vehicles in Q3 2023.
Overall, the Traton group’s sales in Q3 rose 5% year over year to 85,274 vehicles from 81,361 a year earlier.
Scania sold 20,313 trucks in Q3, up 1% compared 20,110 in the same period a year earlier. MAN Truck & Bus sold 14,595 trucks in Q3, a 28% year-on-year dive from 20,295. Volkswagen Truck & Bus sold 10,828 trucks in the most recent three-month period, a 36% jump from 7,964 sold a year earlier.
“Customers in both Europe and North America remain cautious,” Levin told analysts, adding that in Europe a particularly weak German market was hurting Scania and MAN.
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Still, sales in Classes 6 through 8 in North America performed at the high end of expectations through the first nine months of 2024, according to Traton. Through the end of September, sales fell 6% year on year, compared with expectations of down 5% to down 15%. As a result, Traton revised the bottom end of its 2024 North American market estimate to a 10% decrease from a 15% decline. The company maintained its top end prognostication at a 5% decrease.
International has filled its open production slots for the coming months, the company’s top executive said, adding that order intake in medium-duty and severe-duty was quite good while demand for Class 8 on-highway trucks is soft. Levin added that cancellations in Classes 6 to 8 are normal at the moment.
Overall, he said production levels at International are level with demand but with room for careful growth.
International’s order book is full into the first quarter of 2025, but anecdotal evidence suggests customers are hesitant and waiting for the result of the presidential election in November, he added.
