Navistar Drops on Risk of Five Class-Action Lawsuits for Product `Defects'
Navistar International Corp., a maker of commercial and military vehicles, said it is the subject of five lawsuits that could be granted class-action status stemming from “design and manufacturing defects” in truck engines it made for Ford Motor Co.
Navistar said today in a regulatory filing Brandon Burns sued last month in California seeking class-action status for owners and lessees of Ford vehicles with Navistar 6-liter power stroke engines for the model years 2003 through 2007. Four other lawsuits have since been filed seeking class status in Utah, Arkansas, Tennessee and Mississippi.
Separately, Navistar said in statement that profit in the quarter ended Oct. 31 fell to $39 million, or 54 cents a share, from $86 million, or $1.19 a share. Excluding charges of $10 million, or 14 cents a share, in costs related to severance, layoffs and a new labor agreement, profit was 68 cents a share. Analysts projected 59 cents, the average of 13 estimates.
Sales rose 2.6 percent to $3.37 billion, exceeding the $3.25 billion average of 10 analysts’ estimates compiled by Bloomberg.
Navistar fell $2, or 3.4 percent, to $57.17 as of 4:03 p.m. in New York Stock Exchange composite trading, the most since Oct. 19. The shares have gained 48 percent this year.
“The stock’s had a great run so it’s not unusual to see a little profit taking,” Stephen Volkmann, an analyst with Jefferies & Co. in New York, said today in an interview.
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