Navistar International Corp. (NAV), the maker of International brand trucks, fell to its lowest closing price since March 2009 after Bloomberg Industries said truckmakers need to reduce output in the year’s second half.
The Lisle, Illinois-based company slid 3.1 percent to $23.67 a share at the close in New York. Navistar earlier had declined as much as 5.4 percent to $23.11.
“There has been a significant mismatch between incoming truck orders, build rates and retail sales during 2012,” Bloomberg Industries said in a report today. “New order cancellations for heavy-duty trucks in North America rose to 10.1 percent in May, the second-highest level since 2009,” Bloomberg Industries said in a related report.
Navistar on July 6 fell the most since November 2008 after saying it expects additional costs to produce an engine that will meet U.S. emission standards after its earlier technology failed to comply. Navistar has declined 38 percent this year.
The company last month lowered its annual profit forecast to a range of break-even to $2 a share as it tries to obtain U.S. Environmental Protection Agency certification for its engines. Billionaire investor Carl Icahn increased his stake to 11.9 percent in June and hedge fund manager Mark Rachesky disclosed a 13.6 percent position, prompting the company to adopt a poison pill to help fend off hostile bids.
Icahn declined to comment in detail about Navistar during an interview on Bloomberg Television’s “Street Smart.”
“This is not like other companies where the board just sat by,” Icahn said. “He was doing what he felt was right for the company,” the investor said, referring to Navistar Chief Executive Officer Daniel Ustian. “He came up with this different type of engine. Obviously it has had problems.”
Separately, Fitch Ratings cut its issuer default rating on Navistar to B+, or four levels below investment grade, from BB-. Standard & Poor’s Ratings Services lowered its corporate credit rating on Navistar to B, five levels into junk, from B+.
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