Harvester Posts $534-Million Loss

International Harvester Co., struggling to emerge from a financial crisis, on Friday reported a net loss of $534 million for its first quarter ended Jan. 31. The loss was attributed primarily to a $479-million write-off of assets in its money-losing farm-equipment division, which it sold to Tenneco Inc. during the period.

But Chicago-based Harvester said its continuing operations, consisting of its medium- and heavy-duty truck and diesel engine businesses, earned $42 million during the quarter. Those same operations reported a loss of $5 million during the first quarter of fiscal 1984.

Harvester, which announced last November that it would sell its farm-equipment operations to Houston-based Tenneco for $430 million in cash and stock, said Friday that the actual price at the close of the sale on Jan. 31 came to $488 million, including $301 million in cash and $187 million in Tenneco preferred stock.

But that price was still far below the value at which the division had been carried on Harvester’s books.

As a result, Harvester was forced to write off the difference, including the value of its big Farmall tractor plant in Rock Island, Ill., which was not purchased by Tenneco and is being closed.

Harvester also said its farm-equipment division suffered a $97-million operating loss for the first quarter before its acquisition by Tenneco was completed.

Since its financial troubles began following a six-month strike by its union work force in 1979 and 1980, Harvester has been forced to shed huge chunks of its business--and most of its work force--in order to concentrate on its profitable truck and engine operations.

But now that it has shed its money-losing agricultural-implement division, analysts expect Harvester to report earnings from its continuing operations for at least the next two years.

Harvester, which is the nation’s largest producer of medium- and heavy-duty trucks, said its shipments of trucks and diesel engines during the quarter rose 24.6% over the same period last year as the recovery in truck sales continued.