Navistar International target of SEC investigation into accounting issues
A Navistar truck on display during final round play in the Navistar LPGA Classic at the Robert Trent Jones Golf Trail in Prattville, Alabama.
Shares in Navistar International Corp plunged nearly 14 percent today after the truck and engine maker revealed it was the subject of another US Securities and Exchange Commission investigation into “accounting and disclosure matters,” Reuters reported.
The announcement rattled investors who remember when Navistar was delisted from the New York Stock Exchange for 16 months beginning in 2007 after an SEC probe found “accounting problems” in the company’s results over a number of years, Dow Jones Newswires reported.
The company's shares closed down 13.44 percent at $21.44.
Navistar, meanwhile, has withdrawn its full-year earnings forecast until September, when it will release its third-quarter results.
According to the Chicago Tribune, Navistar expects to post an adjusted third-quarter pre-tax loss of $80 million to $115 million before returning to the black in the last three months of the year.
“We expect to return to profitability in the fourth quarter and believe the company will be in a position to improve margins in 2013 as we realize the benefits of our integration and ongoing cost reduction initiatives," Navistar chief executive Dan Ustian said in a statement.
The announcement came a day after Moody’s ratings agency downgraded Navistar deeper into junk status territory after it failed to win US Environmental Protection Agency approval for an alternate pollution-reduction technology. It will instead use a method more in line with industry standards.
The ratings action reflected the “significant challenges” the company will face in “re-establishing the profitability and competitiveness of its US and Canadian truck operations in light of the failure to achieve EPA certification of its EGR emissions technology, the significant reductions in military revenues and substantially higher engine warranty reserves," Moody's said in a statement.
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