Paccar’s Earnings Slip in 4th Quarter, But 2012 Profit Rises on Strong Sales
This story appears in the Feb. 4 print edition of Transport Topics.
Paccar Inc. said fourth-quarter earnings slipped from a year earlier, but its full-year profit increased on strong sales in North America and the expansion of its global operations.
The truck maker said quarterly earnings fell 22.6% to $253.5 million, or 72 cents per share, from $327.7 million, or 91 cents, the year before.
Revenue was $3.99 billion, down 17.7% from $4.85 billion in the final quarter of 2011.
For 2012, however, Paccar’s profit rose 6.7% to $1.11 billion, or $3.12 per share. That compares with net income of $1.04 billion, or $2.86 per share, the previous year. Annual revenue was a record $17.05 billion, up 4.3% from 2011 revenue of $16.36 billion, the company said in its Jan. 31 earnings statement.
Bellevue, Wash.-based Paccar operates companies that manufacture Kenworth and Peterbilt trucks in North America and DAF trucks in Europe.
“Our dealers and customers in North America and Europe are benefiting from good freight demand, as evidenced by strong aftermarket parts and service business and excellent Paccar Financial performance,” Chairman and CEO Mark Pigott said on the company’s earnings call. “Customer truck purchases are focused primarily on replacement as they continue to navigate the uncertain global economy.”
Executive Vice President Dan Sobic said Paccar’s Class 8 retail sales in the United States and Canada improved to 225,000 units in 2012, compared with 197,000 in 2011.
“Our customers are benefiting from good freight tonnage and freight rates,” Sobic said. “In 2012, Paccar achieved a record Class 8 retail market share in the U.S. and Canada of 28.9% as customers benefited from Kenworth and Peterbilt vehicles’ low operating cost.”
Paccar expects to sell between 210,000 and 240,000 trucks in the United States and Canada in 2013, “driven by ongoing replacement of the aging fleet and the overall growth in the economy,” Sobic added.
Pigott also noted higher demand for vocational trucks as housing starts increase, primarily in the United States.
In 2012, Paccar sold 140,400 vehicles worldwide and introduced three new models: the Kenworth T680, the Peterbilt Model 579 and the DAF XF Euro 6. The company also began construction of a new DAF assembly plant in Brazil.
Paccar said it produced record sales in Russia in 2012, with deliveries of DAF and Kenworth trucks rising 80% to 2,700.
On the earnings call, Pigott said he expects first-quarter truck deliveries to be “comparable” with the fourth quarter, but they could be 1% to 2% lower.
In the fourth quarter, Paccar’s North American revenue fell 21.4% year-over-year to $2.18 billion, while its European business slipped 16.8% to $1.12 billion, and the rest of the world declined 4.9% to $697 million.
For 2012, North American revenue rose 10.8% to $9.74 billion, European revenue declined 16.1% to $4.28 billion and revenue in other areas rose 23.2% to $3.03 billion.
Paccar said it invested $511 million in capital projects and $279.3 million in research and development across the world in 2012 to boost manufacturing efficiency and new product development.
For 2013, the company projected capital investments of $400 million to $500 million and research and development expenses of $225 million to $275 million.
