Navistar International Corp. stock on Thursday rose more than 24 percent, to $31.14 a share, in midday trading, after the company named a permanent CEO and released first quarter earnings that beat analyst expectations.
Navistar said Troy Clarke, 57, will become the company's president and chief executive April 15. Clarke, now president and chief operating officer, joined Navistar in January 2010 after a 35-year career at General Motors.
Lewis Campbell, who became executive chairman and interim CEO in August 2012, will step down from those positions and the board. Navistar also separated the roles of CEO and chairman, naming James Keyes as its new non-executive chairman.
Campbell said in a conference call that in his experience when tough decisions are made, a company needs to have a permanent leader who can say, "follow me."
"This is just the right thing to do right now," Campbell said.
Last year, Navistar reached outside for Campbell and named him interim CEO after the sudden retirement of Dan Ustian, a proponent of an engine technology that cost $700 million to develop since 2001 but failed to reduce levels of smog-causing nitrogen oxide to meet 2010 federal standards.
Campbell announced in September a number of cost-cutting initiatives, including selling or closing business units and laying off about 700 salary workers. The company's goal is to cut costs by $175 million per year. He has said he expects Navistar to return to profitability by the end of the year.
The Lisle-based truck-and-engine maker said it is on its way to exceed this year's $175 million cost reduction target. More layoffs are expected. Navistar also plans to continue closing or selling business units.
The company's turn-around plan also includes selling diesel engines from competitor Cummins Inc. in its heavy-duty trucks. This year, Navistar plans to combine its engine technology with that of Cummins to make big-bore 13-liter engines that meet federal emission standards. It submitted its application to the EPA in January and expects to begin production this month. The company expects to get its 13-liter engines certified in time to start selling them in April.
Also on Thursday, Navistar reported a first quarter net loss of $123 million, or a loss of $1.53 per diluted share, compared to a net loss of $153 million, or $2.19 per diluted share, a year ago.
Revenue for the quarter ended January 31 were $2.6 billion, a 12 percent drop from last year. Navistar said the decline was reflective of lower industry demand and the company's lower market share.
Analysts expected a net loss of $126 million and revenues of $2.8 billion.
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