Three Truck Makers’ Profits, Revenue Soar

Three of the world’s largest heavy-duty truck makers reported significant increases in profits and revenue for the three months ended June 30, with North American results playing a large role in all cases.

Original equipment manufacturers Daimler AG, Paccar Inc. and Volvo AB all told shareholders of earnings that increased from the second quarter last year.

“Demand remained strong overall, primarily driven by the need to replace the aging population of trucks. Highway customers are still leading the recovery in the market while vocational truck demand is still below traditional levels,” Volvo said July 22.

“Paccar’s results reflect the benefits of stronger truck sales in North America and Europe and an improvement in aftermarket parts sales and financial services worldwide,” Chairman and CEO Mark Pigott said July 26.

“Unit sales of trucks grew by approximately 40% in the Nafta region and Europe, but the Japanese market continued to suffer from the consequences of the events there this spring and contracted by nearly 50% in the second quarter,” Daimler said July 27.

In U.S. truck sales, volumes are accelerating over levels for last year (7-18, p. 1). After reaching a record high in 2006, they fell sharply through 2009, posting modest growth last year. June was the busiest month for Class 8 sales since March 2007.

Volvo’s increases were particularly strong, with corporate earnings increasing to the equivalent of $836.6 million on revenue of $12.6 billion. In the second quarter last year, the Swedish OEM earned $425.2 million on revenue of $9.06 billion. [Volvo reports in Swedish kronor, and exchange rates are from Bloomberg News.]

Truck making is Volvo’s largest division. In addition to Volvo Trucks, the corporation also operates Mack Trucks and UD Trucks, a medium-duty line.

Quarterly revenue for the truck division improved by 20%, year-over-year, to $7.99 billion, and operating profit more than doubled to $815.1 million from $326.6 million last year. Profit margin at the truck division rose to 10.2% from 6%.

Quarterly sales revenue, order intake and deliveries rose by more in North America than for any other global region for Volvo’s truck division — by 43%, 129% and 135%, respectively.

Daimler, which makes Freightliner and Western Star trucks and Detroit Diesel Corp. engines in North America, posted a lower level of improvement.

On the corporate level, Daimler, which reports in euros, earned the equivalent of $2.45 billion on quarterly revenue of $37.92 billion. In the same time a year ago it earned $1.67 billion on revenue of $31.96 billion.

Daimler’s global truck division earned the equivalent of $682.5 million on revenue of $9.57 billion. In the second quarter last year, it made $381.8 million on revenue of $7.45 billion. The division’s profit margin increased to 7.1% from 5.1% a year earlier, Daimler said.

While truck-unit sales rose by 9% globally to 91,458 trucks, sales in North America soared by 50% to 23,302 units.

Paccar, owner of Kenworth Trucks and Peterbilt Motors, earned $239.7 million in the second quarter on revenue of $3.7 billion. A year ago, it made $99.6 million on revenue of $2.22 billion.

Paccar’s U.S.-Canada operations increased their lead within the corporation, as quarterly revenue grew to $2.08 billion from $1.22 billion a year ago.

European revenue, mainly from DAF Trucks, grew to $1.31 billion from $794.4 million in the 2010 second quarter.

Australia and other locations contributed $569.7 million for the quarter, up from $453.3 million.

Looking at the rest of the year, Paccar Executive Vice President Dan Sobic said that “Class 8 industry retail sales in the U.S. and Canada are expected to be in the range of 180,000 to 200,000 vehicles in 2011. We have lowered the range, due to the uneven economic recovery and supplier capacity constraints, especially tires and chassis components.” (See related story on backlogs, p. 3.)

“Our customers are benefiting from higher freight tonnage and improved fleet utilization rates, resulting in strong growth of our aftermarket parts sales,” Sobic added.

For Navistar International Corp., maker of International trucks and MaxxForce engines, its third fiscal quarter ended July 31, and the Warrenville, Ill., OEM has said it will report results on Sept. 5.