Paccar Revenue Dips in 1Q, but Profits Return

First-quarter sales for Paccar Inc. dipped 1.9%, year-over-year, but the company returned to profitability as it did not have a large, one-time charge as it did in early 2016.

The Bellevue, Wash.-based parent of Kenworth Truck Co. and Peterbilt Motors Co. earned $310.3 million, or 88 cents a share, on revenue of $3.94 billion during the quarter just ended. A year earlier, the company lost $594.6 million, or $1.69, on sales of $4.01 billion.

The company’s three major segments — new trucks, parts sales and financial services — remained profitable. New-truck deliveries dropped in the United States and Canada, and for the company as a whole, although they gained in Europe and the rest of the world.

The year-ago charge for $942.6 million was a settlement paid to the European Commission regarding Paccar’s DAF Trucks unit based in the Netherlands. The charge reduced net income by $2.68 a share, the company said in its April 25 earnings report.

“Paccar benefited from increasing truck production in North America and Europe, as well as record quarterly Paccar Parts pretax profits,” CEO Ron Armstrong said.

The company maintained its January estimate for U.S. and Canadian Class 8 retail truck sales at 190,000 to 220,000 units, about the same as 216,000 vehicles in 2016.

Among Paccar’s divisions, quarterly new-truck sales dipped to $3.13 billion from $3.27 billion, while global operating profit for the division declined to $241.7 million from $304.1 million.

If businesses weren’t buying as many trucks, they were at least buying parts for the equipment they kept. Sales rose to $786.7 million from $719.5 million, and profits to $151.7 million from $134.6 million.

The company also has a financial services unit, where revenue increased but profitability declined.

By geography, quarterly truck deliveries outside the United States and Canada — mainly Europe — were 18,000 units, up from 16,800 in the 2016 period. For the United States and Canada, deliveries declined to 17,000 vehicles from 18,500.

Despite the volume decline, the United States and Canada still produce a majority of quarterly sales, $2.52 billion, versus $1.72 billion from the rest of the world.