The Lisle, Illinois-based truck and engine maker also said it may sell "non-core businesses" as it reported a paltry third-quarter profit that nevertheless beat expectations. Navistar's shares rose 17.4 percent to close at $23.97.
Navistar, operating under an interim CEO installed last week, earned $84 million, or $1.22 per share, for the three months ended July 31. That was off more than 90 percent from the year-earlier's $1.4 billion, or $18.24 per share, which included a $1.48 billion tax benefit. Revenue dropped 6 percent, to $3.3 billion, but exceeded Wall Street forecasts by 10 percent.
Navistar is expected to lose $300 million for the fiscal year ending in October, compared with a $1.8-billion tax-advantaged profit the previous fiscal year. Revenue is expected to slip nine percent, to $12.7 billion.
"Clearly we are not pleased with these results," interim CEO Lewis Campbell said in a statement. "I believe we can accelerate the pace of progress to deliver significant improvements during the next 12 to 18 months."
The former Textron Inc. CEO succeeded Dan Ustian, who resigned under pressure after 37 years with the company.
Fiscal 2013 earnings are projected at $102 million on revenue of $13.9 billion.
The company is also boosting efforts to lower discretionary spending and lower its material costs further.
During an earnings call today, Mr. Campbell said that Navistar would focus on North American truck, engine and parts operations, where quality, cost and consumer satisfaction are priorities. “Quite simply, we need to step up the pace and address our problems as quickly as we can,” he said.
Another worrisome target: Navistar's $3.2 billion in unfunded pension and health care liabilities.
“I think we have a plan to possibly address that in a different way,” he said, without offering specifics. “It's not something we're kind of looking the other way and pretending it's not there.” He also said, "We got a really good handle on cash."
Although Mr. Campbell, 66, has an interim title, Navistar hasn't outlined search plans for a more-permanent CEO. He said he and his wife reached an agreement over the weekend to buy a house in the area.
“So as they say in poker, 'I'm all in.'” He added: "I did plenty of due diligence, and while there are a host of issues that need to be resolved, there was nothing I felt was insurmountable when deciding whether or not to pursue this opportunity.”
He told analysts he has not spoken with large shareholders.