September 8, 2010 / 2:19 PM / 8 years ago

UPDATE 3-Navistar profit tops view but shares slump on sales

* Q3 EPS $1.83 vs Street view $1.47

* Sales miss Street view; full-year sales forecast is cut

* Shares down 5 percent (Recasts, adds share fall, byline)

By James B. Kelleher

CHICAGO, Sept 8 (Reuters) - Truck maker Navistar International Corp (NAV.N) posted higher-than-expected quarterly profit on strong sales of armored fighting vehicles to the U.S. military, but overall sales fell short of forecasts and the company’s shares fell 5 percent.

Navistar reported continued weakness in its core commercial vehicle market and slashed its full-year sales forecast, saying some military sales it had expected to book this year would be deferred until 2011.

Its full-year earnings forecast indicated a weaker-than-expected fiscal fourth quarter, which began Aug. 1.

The company, which makes a variety of specialty trucks and buses, said sales of those products in the United States and Canada were up 7 percent from a year earlier in the fiscal third quarter, a sign the industry is rebounding from its recession lows. But it said economic conditions were still difficult.

Navistar reported a profit of $137 million, or $1.83 a share, for the quarter. A year earlier it posted a loss of $12 million, or 16 cents a share.

Sales rose 28 percent to $3.2 billion.

Analysts, on average, expected the Warrenville, Illinois-based company to report a profit of $1.47 a share on sales of $3.57 billion, according to Thomson Reuters I/B/E/S.

Navistar cut its full-year sales forecast to $12 billion, down from a previous forecast of $13.2 billion to $13.7 billion.

It stood by its full-year earnings forecast of $2.75 to $3.25 a share and promised to come in at the upper end of that range, saying it had “found other measures to stay within previously anticipated earnings guidance.”

Ann Duignan, an analyst at JP Morgan, said the third-quarter earnings beat and the unchanged full-year earnings guidance implied Navistar would report a fiscal fourth quarter profit of 27 cents to 77 cents a share.

Analysts, on average, expected 92 cents a share, according to Thomson Reuters I/B/E/S.

Navistar shares were down $2.22 to $42.14 in morning trading on the New York Stock Exchange. (Reporting by James B. Kelleher and Bijoy Koyitty; Editing by Maureen Bavdek, Dave Zimmerman and John Wallace)

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