PACCAR’s Net Earnings Up $73 Million in 2Q

PACCAR’s Net Earnings Up $73 Million in 2Q

PACCAR (Nasdaq: PCAR) reported net earnings of $99.6 million ($0.27 per diluted share) for the second quarter of 2010, compared to $26.5 million ($0.07 per diluted share) in the second quarter last year.

Second-quarter net sales and financial services revenues were $2.46 billion, compared to $1.85 billion reported in 2009. Net sales and financial services revenues for the first six months of 2010 were $4.69 billion compared to $3.83 billion last year. For the first six months of 2010, PACCAR reported net income of $167.9 million ($0.46 per diluted share) compared to $52.8 million ($0.14 per diluted share) in 2009.

“Against a backdrop of global truck markets that are only gradually emerging from historically low levels, PACCAR’s results reflect the benefits of higher truck and parts sales and improving financial services profits worldwide,” said Mark C. Pigott, chairman and chief executive officer. “Our customers are benefiting from increased freight tonnage, which has resulted in higher fleet utilization rates, resulting in positive gains for our aftermarket parts sales.

“PACCAR’s excellent balance sheet, including over $2.1 billion in manufacturing cash and marketable securities, and positive operating cash flow have enabled ongoing investments which enhance operating efficiency and the development of innovative new products, such as the PACCAR MX diesel engine which went into production in Kenworth and Peterbilt trucks in June. The U.S. and Canadian truck market is gradually adjusting to higher priced vehicles resulting from the EPA 2010 emissions change. The European truck market is still lagging behind last year’s volumes, but DAF achieved a significant increase in market share, which has delivered improved financial results.”

DAF achieved a record market share of 16.3 percent in the above 15-tonne market in the first half of 2010.

“DAF’s medium-term market share goal is 20 percent. DAF is the market share leader in the European tractor market and has the second highest overall market share in Europe, as fleets recognize DAF’s quality leadership, low operating costs and excellent resale value,” said Harrie Schippers, DAF president. “The estimate for 2010 industry sales in the above 15-tonne truck market in Europe is 160,000-170,000 units, comparable to 2009, as the Eurozone countries continue to be impacted by economic challenges.”

“Class 8 industry retail sales in the U.S. and Canada are expected to be in the range of 110,000-130,000 vehicles in 2010, reflecting the uneven economic recovery, high unemployment, and the continued low level of housing starts and auto production. There are some encouraging signs as freight tonnage continues to modestly increase and our customers’ profitability benefits from stable fuel prices and recent improvements in freight rates,” said Dan Sobic, PACCAR executive vice president. “Truck retail sales are still below replacement demand levels, resulting in the North American truck average fleet age of nearly seven years. The truck industry demand for parts and service business has improved due to increasing freight tonnage, higher fleet utilization and increased maintenance for the aging truck population,” added Sobic.

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