Navistar Q4 Word Games

Navistar International (NAV) played some word games in their press release. The press release stated at the front end “Driven by a pickup in fourth-quarter commercial truck volume and continued military sales....” OK did you spot the continued military sales part? When you drill down to Segment Results Trucks you get this line “Decreased U.S. military sales....” They are shifting gears and stepping away from the initial inference. Most investors remember the initial comments first and have less retention as you continue to read lengthy press releases.

In all honesty if you continue reading Segment Results under Parts you will find this snippet. “Military sales increased by $519 million, which more than offset decreased demand caused by the global economic climate.” Not exactly the same context as “...continued military sales...” The military is spending money on repairs and not buying as much new stuff. The private sector is not spending money on repairs because if the economy is off, truck usage is down and trucks are not wearing out as they used to.