Navistar International is restating its results for the nine months ended July 31, 2008, to correct accounting errors that involve cost of products sold, inventory, and accounts-payable valuations.
As a result, the company will increase earnings by $50 million to $70 million for the period.
The maker of trucks and diesel engines said that the restatements related to accounting in its Truck segment. More specifically, it said that in the July three-month period costs of products sold were overstated; and income before taxes, net income, and earnings per share were understated. In addition, inventories were understated and accounts payable were understated.
Navistar said that its review process is continuing, and may extend to the first and second quarters of 2008. “Consequently the matters identified at this stage, and any assessment of the nature, scope, or amount of restatement, are preliminary and subject to change,” it warned in a regulatory filing.
The company pointed out that it earlier had determined that disclosure controls and procedures were not effective, due in part to material weaknesses in internal control over financial reporting. It noted in the latest filing that as a result of the need to restate quarterly financial statements, management has concluded that such disclosures should be revised.
That assessment, while not yet complete, will result in the disclosure of a material weakness in the area of inventory accounting procedures.
Back in early 2007, the company was delisted from the New York Stock Exchange after 99 years when it failed to complete its restatement of its 2005 results, missing several deadlines. It returned to the Big Board earlier this year after fixing accounting errors.