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PACCAR’s 1Q Earnings Down $266 Million

PACCAR (Nasdaq: PCAR) earned $26.3 million ($.07 per diluted share) for the first quarter of 2009, compared to $292.3 million ($.79 per diluted share) earned in the first quarter last year. First-quarter net sales and financial services revenues were $1.99 billion compared to $3.94 billion reported for the first quarter of 2008.

“PACCAR’s results reflect the impact of a slower economy on freight shipments and truck purchases worldwide,” said Mark C. Pigott, chairman and chief executive officer. “I am very proud of our 17,000 employees who have delivered good performance to our shareholders and customers in today’s very challenging business conditions. PACCAR’s strengths continue to be exceptional quality products and services, geographic diversification and strong aftermarket revenues and financial services income.

“PACCAR’s excellent balance sheet and positive cash flow have enabled ongoing investments to enhance operating efficiency and develop innovative products such as new diesel engines and hybrid vehicles. These investments will contribute to the company’s achievement of its long-term growth objectives. The difficult recession continues to affect our business in North America and Europe as truck markets remain weak. The first quarter 2009 financial results were negatively impacted by lower build rates, temporary plant shutdowns and reduced gross margins. These challenging market conditions are continuing as we enter the second quarter of 2009. PACCAR has rigorously reduced operating expenses and capital expenditures to align its business with the current market.”

PACCAR’s Board of Directors declared a quarterly cash dividend in the amount of eighteen cents ($.18) per share, payable on June 5, 2009, to shareholders of record at the close of business on May 19, 2009.

“Class 8 industry retail sales in the U.S. and Canada are expected to be in the range of 100,000-130,000 vehicles in 2009, reflecting continued economic weakness, specifically in lower housing starts and auto production. The good news is that even though freight tonnage is below year-ago levels, it has improved slightly in the last two months. Additionally, our customers’ profitability is benefiting from lower fuel prices and good availability of drivers,” said Dan Sobic, PACCAR executive vice president.

“Truck retail sales are below the five-year average of 235,000 units resulting in the highest average age of the North American fleet in 15 years because of low replacement levels. The truck industry is generating steady parts and service business due to the aging fleet and truck sales are poised to rebound when economic conditions improve.”

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