Paccar Remains Profitable But at Lower Levels
Revenue and net income declined at global truck manufacturer Paccar Inc. for the fourth quarter and the year, but the Bellevue, Washington-based corporation did remain profitable in both periods.
Original equipment manufacturer Paccar, the parent of Kenworth Truck Co. and Peterbilt Motors Co., earned $288.8 million, or 82 cents a share, on quarterly revenue of $3.77 billion. In the fourth quarter of 2015, it had net income of $347.2 million, or 98 cents, on revenue of $4.06 billion.
All three major divisions — trucks, parts and financial services — were profitable for both the quarter and the year.
“Paccar’s financial results reflect the company’s premium-quality products and services, increased European truck deliveries, higher truck market share, and good aftermarket parts and Paccar Financial Services results,” CEO Ron Armstrong said in the company’s Jan. 31 earnings release.
While 2015 was a strong sales year for the OEM, management believes the downturn in 2016 probably will extend into this year. Heavy-duty U.S.-Canadian sales were 216,000 last year industrywide, and they are expected to be in the range of 190,000 to 220,000 vehicles this year. Sales in 2015 were 278,000 units, the company said.
Paccar Executive Vice President Gary Moore said the company boosted its 2016 Class 8 market share to 28.5% from 27.4% in 2015.
Looking at a geographical breakdown, the United States and Canada remained the largest market for Paccar. Quarterly revenue fell by 10.6% year-over-year to $2.2 billion, and truck deliveries declined by 9.4% to 14,400 over the same time.
Quarterly revenue and truck deliveries also dipped in Europe, where the company makes DAF Trucks. European revenue dipped 3.2% to $1.3 billion, while deliveries slipped 1.3% to 14,800 trucks.
The much smaller rest-of-the-world grouping, including Australia and Brazil, advanced in terms of revenue and deliveries.
Annual results fell precipitously because of a second-quarter settlement with the European Commission on price fixing, an investigation that affected several truck OEMs in addition to DAF Trucks. The settlement amount was $833 million.
The OEM had net income of $521.7 million, or $1.48 a share, on 2016 revenue of $15.85 billion. In 201, it earned $1.6 billion, or $4.51, on revenue of $17.94 billion.
