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PACCAR earnings down 28%

Jason Cannon April 23, 2013

KW_wheelA sharp but expected decline in sales dragged down PACCAR’s earnings 28 percent the company announced Tuesday.

PACCAR earned $236.1 million in the first quarter of 2013, down $91.2 million compared to the $327.3 million posted in the first quarter last year.

First quarter 2013 net sales and financial services revenues were $3.92 billion compared to $4.78 billion reported for the first quarter of 2012.

“Class 8 industry retail sales for the U.S. and Canada in 2013 are expected to be in a range of 210,000-240,000 vehicles, compared to the 225,000 vehicles sold in 2012, driven primarily by the ongoing replacement of the aging truck population, and projected economic growth in the second half,” said Dan Sobic, PACCAR executive vice president. “The truck market should benefit from improvements in job growth and auto production, as well as increased housing starts and construction activity. Annual replacement demand for the U.S. and Canadian truck market is estimated to be approximately 225,000 units.”

Mark C. Pigott - Chairman, Chief Executive Officer and Chairman of Executive Committee says PACCAR delivered 30,500 trucks during the quarter, which was in line with projections.

“Looking forward, PACCAR truck deliveries in the second quarter are expected to increase 5 to 10 percent compared to the first quarter,” he added. “It’s encouraging to note that housing starts in the U.S. are projected to be over 1 million units this year and there is some growth in nonresidential construction. Other good economic news is that North American auto production is expected to be 15 million vehicles or higher this year. These positive trends should benefit truck demand. In fact, freight tonnage in the U.S. is at the highest level in 10 years. That’s good news. These indicators have translated into many dealers and customers earning record results in 2012.”

First quarter company highlights included the launch of Kenworth and Peterbilt’s new range of vocational vehicles at the Mid-America truck show held in Louisville, Kentucky, last month and the introduction of the new PACCAR MX-11 engine.

The PACCAR MX-11 engine is planned to be available in Kenworth and Peterbilt trucks in 2015.

Revenues from PACCAR’s Financial Services, which includes its truck leasing arm soared to well above last year levels.

PACCAR Financial Services were $293.1 million compared to $261.4 million in 2012.

“During the first quarter of 2013, profit increased due to growth in portfolio balances and lower borrowing costs,” said Bob Bengston, PACCAR vice president.

Parts revenue slipped 1.9 percent and revenue from the truck segment declined 23 percent.

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