Preliminary December truck orders released by A.C.T. were slightly lower than expected, according to Bear Stearns' forecast.
Class 8 orders came in at 17,700 (vs. Bear Stearns' 18,000-20,000 forecast), down 53.6% year-over-year (vs. down 39.0% year-over-year to 18,924 in November).
Class 5-7 orders came in at 10,000 (vs. the 14,000-16,000 forecast), down 54.2% year-over-year (vs. down 24.5% to 11,624 in November).
"We continue to believe investors greatly underestimate the magnitude of the '05/'06 pre-buy," Bear Stearns said in a release. "The average age of the public TL fleet declined from roughly 28 months in '02 to 17 months at year-end '05. Conservatively, we project it declined to 14 months at year-end '06. There have been no other secular changes of which we're aware in the end market that would drive a secular decline in fleet ages.
"In 2006, the group's performance was astonishing-particularly in the face of weakening truck fundamentals and a highly-visible downturn in Class 8 demand. We've struggled with the disconnect between the end market and the OEMs for some time. Our best sense is, it's a case of, it doesn't matter 'til it matters."