OEMs, Suppliers Tested by Falling Sales, Generate Mixed Second-Quarter Results
This story appears in the Aug. 8 print edition of Transport Topics.
Truck and trailer makers are usually profitable during the second quarter, but original equipment manufacturers and their largest suppliers reported they had to cope with falling sales year-over-year.
At Paccar Inc., quarterly net income rose to $481 million, or $1.37 per share, compared with $447 million, or $1.26, during the 2015 second quarter.
Revenue for Bellevue, Washington- based Paccar, the parent of Peterbilt Motors and Kenworth Trucks, fell to $4.4 billion from $5 billion in the year-ago period. Revenue in the six-month period slipped to $8.1 billion from $9.3 billion in the year-earlier period.
The company’s North American deliveries fell by 7,000 trucks, to 19,800 from 26,800 in the 2015 quarter.
Trailer maker Wabash National Corp. raised second-quarter net income, driven by improvements in margins and operating efficiencies, even though revenue declined.
Profits totaled $36 million, or 53 cents per share, compared with $29 million, or 41 cents.
Net sales fell by $44 million to $471 million, compared with $515 million a year earlier, Wabash said. Quarterly sales for commercial trailers, its largest unit, fell to $382 million from $412 million.
The Lafayette, Indiana-based OEM said, however, that its quarterly gross profit margin climbed to 18.1% from 11.9% a year earlier “due to continued execution of a pricing strategy committed to favoring margin over volume and operational excellence within our manufacturing facilities.”
“A healthy backlog of $860 million [and] overall trailer market projections well above replacement levels for the remainder of 2016 … have put us on pace to deliver another record year in 2016, our fifth consecutive year of record performance,” Wabash CEO Dick Giromini said in a statement.
Headwinds were harder on Volvo Group and Daimler AG.
Gothenburg, Sweden-based Volvo Group reported earnings and sales fell in the second quarter, citing as crucial the slowdown in the North American truck market that led to a plunge in orders.
Heavy-duty truck brands for the company include Volvo Trucks North America and Mack Trucks.
Quarterly profit for the period fell to $220 million, or 11 cents, compared with $590 million, or 29 cents, in the year-earlier period. New sales slid to $9.1 billion from $9.7 billion, year-over-year.
Year-to-date, North American truck orders sank 45%, to 16,359 from 29,819.
Stuttgart, Germany-based Daimler AG, the world’s largest truck manufacturer, reported second-quarter net profit rose 3% to $2.64 billion — or $2.50 per share — powered by sales of cars and vans even as U.S. orders for medium- and heavy-duty trucks plunged.
Daimler’s truck brands here include Freightliner Trucks and Western Star.
In the quarter, North American orders for Daimler’s medium- and heavy-duty trucks dropped to 25,000 trucks compared with 40,000 a year earlier, the OEM said.
“In North America, weak overall investment is having a significant impact on the truck market. From today’s perspective, demand for Class 6-8 trucks is likely to decrease by approximately 15%,” according to the earnings report.
In other earning news:
• Rush Enterprises, the nation’s largest truck dealership chain, said net income was cut nearly in half and revenue slipped in the second quarter as large fleet customers “severely” reduced demand for new trucks.
Quarterly net income fell to $11 million, or 27 cents per share, compared with $20 million, or 48 cents a year earlier.
Revenue slipped to $1 billion from $1.3 billion in the 2015 period.
“Continued softness in the energy sector, a choppy freight environment, excess Class 8 fleet vehicle capacity and declining used-truck values plagued the industry and negatively impacted our Class 8 new and used-truck sales, and parts and service revenues in the second quarter,” W.M. “Rusty” Rush, chairman and CEO, said in a statement.
• Components supplier Accuride Corp. reported net income dropped to $2 million, or 5 cents per share, compared with $6 million, or 13 cents, in the second quarter of 2015.
Sales were $164.1 million, down 11.5% from the 2015 period.
“Our markets and those of our customers are becoming increasingly competitive as the global, North American and European economic recoveries remain modest,” the company noted.
Accuride makes commercial vehicle wheels, wheel-end components and assemblies.
• Wabco Holdings of Brussels reported earnings and revenue rose in the second quarter. Net income increased 14% to $75 million, or $1.33 a share, compared with $66 million, or $1.12, a year earlier. Sales were $732.2 million, a rise of 10.8% from the 2015 period.
Wabco said about 14% of its sales are in the United States.
