Earnings call transcript Troy A. Clarke, Navistar International Corporation - Chairman, President & CEO
Our third quarter was another great quarter for Navistar. Our operational and financial progress demonstrates that our investments are paying off. Market share is increasing, revenue and earnings are growing. And now we're accelerating investments to improve operations and deliver on our promise of all time.
We delivered another strong quarter. Total revenues grew 17% to over $3 billion. Adjusted EBITDA grew 22%, and adjusted net income increased 55%. The growth came from the Truck segment where volume rose 45% year-over-year. Retail market share continues to grow year-over-year as well. In the third quarter, Class 8 share grew 1.6 points to 13.9%, and medium Class 6/7 share rose 4.9 points to 26.8%.
From an industry perspective, U.S. economy is moderating. A number of key economic indicators remain above their long-run averages but they are trending lower. U.S. GDP is softening and is expected to be around 2% for the balance of the year. The 2% threshold's important to us as the industry tends to add capacity when GDP increases more than 2% annually. The ISM Manufacturing Index, something we also follow, also continues to trend lower and is hovering around 50, indicating to us that manufacturing growth is shifting to neutral. Yet consumer confidence and spending remain positive, but new housing permits are still running lower than expected. Lots of mix signals indicating the economy that is in transition. The Truck market is decelerating. Truck orders tend to be a leading indicator of economic activity as carriers forecast their need for Trucks. As freight tonnage and rates declined, industry orders for Class 8 Trucks, in particular, have also declined about 75% in the quarter. The used truck market is also slowing, pressuring prices as inventories of less than 5-year old sleepers are rising as trade receipts have increased in conjunction with new truck deliveries. Build rates of new trucks have exceeded orders, causing industry Class 8 backlogs to decline 44% since peaking last October.
Our third quarter was another great quarter for Navistar. Our operational and financial progress demonstrates that our investments are paying off. Market share is increasing, revenue and earnings are growing. And now we're accelerating investments to improve operations and deliver on our promise of all time.
We delivered another strong quarter. Total revenues grew 17% to over $3 billion. Adjusted EBITDA grew 22%, and adjusted net income increased 55%. The growth came from the Truck segment where volume rose 45% year-over-year. Retail market share continues to grow year-over-year as well. In the third quarter, Class 8 share grew 1.6 points to 13.9%, and medium Class 6/7 share rose 4.9 points to 26.8%.
From an industry perspective, U.S. economy is moderating. A number of key economic indicators remain above their long-run averages but they are trending lower. U.S. GDP is softening and is expected to be around 2% for the balance of the year. The 2% threshold's important to us as the industry tends to add capacity when GDP increases more than 2% annually. The ISM Manufacturing Index, something we also follow, also continues to trend lower and is hovering around 50, indicating to us that manufacturing growth is shifting to neutral. Yet consumer confidence and spending remain positive, but new housing permits are still running lower than expected. Lots of mix signals indicating the economy that is in transition. The Truck market is decelerating. Truck orders tend to be a leading indicator of economic activity as carriers forecast their need for Trucks. As freight tonnage and rates declined, industry orders for Class 8 Trucks, in particular, have also declined about 75% in the quarter. The used truck market is also slowing, pressuring prices as inventories of less than 5-year old sleepers are rising as trade receipts have increased in conjunction with new truck deliveries. Build rates of new trucks have exceeded orders, causing industry Class 8 backlogs to decline 44% since peaking last October.