Navistar edges higher after positive results; Finisar’s weak guidance worries investors

By Stephanie N. Rotondo

Seattle, Sept. 8 – Navistar International Corp.’s 4.75% convertible notes due 2019 were in play on Friday, as investors reacted well to the company’s Thursday earnings release.

One trader saw the notes in a 105 to 105.25 context. Another market source echoed that level, noting that it was up from 104.875 to 105.125 previously.

Navistar’s shares were also on the rise, adding 69 cents, or 1.81%, to close at $38.89.

On Thursday, the Lisle, Ill.-based heavy-duty truck and engine manufacturer reported its fiscal third-quarter results. The quarter produced net income of $37 million, or adjusted earnings per share of 37 cents.

Revenue was up 6% year over year at $2.21 billion.

Zacks Consensus Estimate was for adjusted EPS of 28 cents on revenue of $2.16 billion.

The profit marked the second time in the last 20 quarters that Navistar reported results that were in the black. In the same quarter of 2016, the company had posted a loss of $34 million.

Finisar Corp. also put out earnings on Thursday. However, unlike Navistar, there weren’t a lot of positive takeaways.

As such, a trader said the company’s 0.5% convertible notes due 2036 traded down to 93 versus a stock price of $20.85.

For its part, the company’s equity was off nearly 5% in Friday trading.

For its fiscal first quarter, the Sunnyvale, Calif.-based manufacturer of optical communication components and subsystems posted adjusted EPS of 40 cents on revenue of $341.8 million.

Revenue was down 4.4% from the previous quarter.

Analysts had forecast adjusted EPS of 40 cents on revenue of $341 million.

For the current quarter, the company provided guidance of adjusted EPS of 27 cents to 33 cents, on revenue of $322 million to $342 million.

That compares to consensus estimates of adjusted EPS of 50 cents on revenue of $370 million.

Additionally, the company said it was struggling to ramp up production of some of its 3D sensors. That could have an impact on the next iPhone release from Apple, which is said to feature such sensors for facial recognition purposes.

Apple is set to launch the new phone on Sept. 12.

Mentioned in this article:

Finisar Corp. Nasdaq: FNSR

Navistar International Corp. NYSE: NAV

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