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What: Shares of Navistar International sank as low as 10% today after the truck and engine maker's quarterly results missed Wall Street expectations.
So what: The shares have been rallying of late on activist investor Carl Icahn's recent stake in the company, but a big fourth-quarter loss of $2.77 billion is forcing Wall Street to sober up. Navistar's failed diesel-engine technology project continues to weigh heavily on sales, while tax expenses rose to $2 billion in the quarter, suggesting that management still has a long way to go in its restructuring efforts.
Now what: Navistar said it expects to launch a new engine model early in 2013 and that it's on pace to reduce structural costs by $175 million. "We continue to make significant progress on our turnaround and the complexity of this quarter's results is reflective of the actions necessary during this time of transition," said Chairman and CEO Lewis Campbell. Of course, when you couple the demand headwinds facing Navistar with its still-hefty debt load, buying into that bullishness seems particularly risky.
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The article Why Navistar Shares Stalled originally appeared on Fool.com.
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