LISLE, Ill. – Truck and engine maker Navistar said Wednesday the federal government may take action against the company in a dispute over environmental certification of heavy-duty diesel engines.
The investigation covers possible violations of securities law and a previous settlement between Navistar and the Securities and Exchange Commission. The company's shares dropped about 6 percent in afternoon trading.
Navistar said it received "Wells Notices" from the SEC on Aug. 13 and 17, which means the SEC's investigators are recommending that the agency take civil action against the company and former Chairman and CEO Daniel Ustian. The SEC is also investigating Navistar's disclosures regarding Ustian's retirement in August 2012.
Navistar said it is cooperating with the SEC, although the two sides have gone to court in a dispute over some of the documents the agency requested. A court ordered Navistar to turn over some of those documents but said it wasn't required to hand over others.
Shares of Navistar fell $1.01 to $16.35 in afternoon trading. The shares have fallen 58 percent over the last year and are trading around their lowest prices since March 2009.
In July the Justice Department sued Navistar on behalf of the Environmental Protection Agency, saying the company sold 7,750 diesel engines that didn't meet 2010 emissions standards. The company says the engines weren't subject to the standards because they were made in 2010, while the EPA says they were made the previous year.
The government is seeking about $290 million in civil penalties from the Lisle, Illinois-based company.
The SEC previously investigated Navistar and said the company overstated its pretax income by about $137 million from 2001 to 2005. It said management did not exert enough oversight over the company's accounting and reporting operations. As part of a settlement in 2010, several executives agreed to pay civil penalties and Ustian returned part of his 2004 bonus.
Navistar International Corp., which hasn't reported a quarterly profit since late 2012, also reported it lost of $28 million, or 34 cents per share, in its fiscal third quarter. Excluding one-time gains and costs the company said it earned 19 cents per share. Its revenue in the three months ended July 31 fell 1 percent to $2.54 billion.
Analysts expected a profit of 11 cents per share and $2.76 billion in revenue, according to Zacks Investment Research.
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Elements of this story were generated by Automated Insights (http://automatedinsights.com/ap) using data from Zacks Investment Research. Access a Zacks stock report on NAV at http://www.zacks.com/ap/NAV
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Keywords: Navistar, Earnings Report
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