PACCAR's revenues and net income for the second quarter and first half of 2007 were down over last year, but Mark C. Pigott, chairman and chief executive officer, characterized them as "excellent" in light of the downturn.
"PACCAR has benefited from balanced global diversification and continued growth in aftermarket parts and financial services revenues," he said. "PACCAR's robust business in Europe and international markets has partially countered the emissions regulation-induced truck market decline in the U.S. and Canada."
PACCAR earned $298.3 million ($1.19 per diluted share) for the second quarter of 2007 compared to $369.9 million ($1.47 per diluted share) earned in the second quarter last year. Second quarter net sales and financial services revenues were $3.72 billion. For the first six months of 2007, PACCAR reported net income of $663.9 million ($2.65 per diluted share), compared to $711.9 million ($2.82 per diluted share) in 2006. Net sales and financial services revenues for the first six months of 2007 were $7.70 billion compared to $8.02 billion last year.
Groundbreaking of PACCAR's new $400 million engine production facility and technology center in Columbus, Mississippi occurred on July 17. In April 2007, PACCAR Parts opened its new 260,000-square-foot parts distribution center (PDC) on a 33-acre site in Oklahoma City. Construction also recently commenced on a new PDC in Budapest, Hungary, which will support DAF's ongoing expansion into Central and Eastern Europe.
"Upon completion of the new Budapest facility, PACCAR will operate 13 PDCs, providing daily delivery of aftermarket parts to PACCAR's growing base of dealers and customers," said Rick Gorman, PACCAR vice president and PACCAR Parts general manager. "PACCAR Parts has more than tripled its sales since 1996, reaching $2.0 billion in 2006. These strategic capital investments will enable the aftermarket parts business to continue its strong double-digit growth."
In June 2007, a 105,000-square-foot increase to the Kenworth plant in Chillicothe, Ohio was completed. "The expansion of the Chillicothe plant will increase Kenworth capacity by 20 percent, positioning it for market expansion, as well as enhance the industry-leading quality of Kenworth vehicles," said Bob Christensen, PACCAR vice president and Kenworth general manager.
"The European economy continues to experience robust growth," shared Aad Goudriaan, DAF Trucks president. "In the second quarter, business and consumer confidence reached six-year highs and unemployment fell to a ten-year low. Industry truck sales in Western Europe above 15 tonnes are strong and could reach 265,000-280,000 compared to 268,000 in 2006. DAF's range of premium vehicles are the quality and resale value leaders in Europe and our goal is to achieve over 20 percent market share. DAF is benefiting from strong growth in Central and Eastern European markets and is set to achieve record sales and profit in 2007. Sales in Australia, Mexico and other international markets are on pace to achieve record results in 2007."
"The U.S. and Canada truck industry 'prebuy' experienced in the second half of 2006 continues to impact new vehicle purchases. However, steady GDP growth and regular replacement demand should positively influence demand in the second half of the year," said Tom Plimpton, president. "It is expected that U.S. and Canadian Class 8 sales will be in the range of 180,000-210,000 units for 2007. The superior quality, reliability and resale value of Kenworth and Peterbilt trucks have contributed to PACCAR achieving a strong share of industry orders and retail sales."
In its May 14, 2007 edition, Barron's magazine recognized PACCAR as one of the best-performing companies. Barron's evaluated and ranked the 500 largest U.S. and Canadian companies by sales growth, cash flow and shareholder return and placed PACCAR in the top five.
In its June 2007 edition, IndustryWeek (IW) recognized PACCAR as one of the 50 best public manufacturing companies in the United States. IW considered three-year performance in revenue growth, profit margin, inventory turns, asset turnover, return on assets and return on equity, with emphasis on 2006 results.
In May 2007, AMR Research published its third annual "Supply Chain Top 25" and named PACCAR to the list for the first time. AMR Research identified companies that have demonstrated excellence in supply chain management performance utilizing financial metrics including return on assets, revenue growth and inventory turns.