Paccar watches revenues, earnings drop

Truck maker Paccar Inc., which owns Kenworth Truck Co., Peterbilt Motors Co. and European truck makers DAF and Foden, said its earnings dropped by over 50% in the third quarter of 2001, while revenues remained relatively flat. Bellevue, WA-based Paccar said it earned $39.4 million in the third quarter of 2001 on revenues of $1.5 billion, down from the $93.1 million it earned on $1.8 billion in revenues in the same period last year. For the first nine months of 2001, Paccar reported net sales and financial service revenues of $4.6 billion and net income of $123.2 million - compared to net income of $379.1 million over the same period in 2000. "The truck market in North America remains challenging due to economic turbulence," said Mark Pigott, Paccar's chairman. "Paccar's financial results this year reflect the lower, recessionary demand for heavy-duty trucks in North America.” Pigott said Class 8 retail unit sales for the first nine months of 2001 were 37% lower than last year, and a recovery is not expected in the near-term. The industry is still being impacted by lower freight tonnage, higher operating costs and a high level of used trucks, he said. Paccar added that, while the European truck market is having a good year, the slowing "Eurozone" economy has caused truck production in Europe to drop 10% to 15% below last year's levels. In response to lower order levels, DAF reduced production 11% earlier this month.

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