PACCAR earned $68.3 million ($.19 per diluted share) for the first quarter of 2010 compared to $26.3 million ($.07 per diluted share) in the first quarter last year. First quarter net sales and financial services revenues were $2.23 billion compared to $1.99 billion reported for the first quarter of 2009.
“PACCAR’s results reflect the benefits of stronger truck sales in North America and an improvement in financial services profits and parts revenues worldwide,” said Mark C. Pigott, chairman and chief executive officer. “I am very proud of our 15,000 employees who have delivered superior results to our shareholders and customers in a very challenging recession. PACCAR’s excellent performance in profitability, shareholder return and new product development, against a backdrop of a very difficult global automotive industry, is remarkable.
“PACCAR’s strong balance sheet and positive cash flow have enabled the company to maintain ongoing investments to enhance operating efficiency and develop innovative products such as the PACCAR MX diesel engine and introduce many new truck models. These investments contribute to the company’s long-term growth. Financial results for the first quarter reflect the benefit of a small ‘pre-buy’ in the U.S. and Canadian markets as customers transition to the new EPA 2010 engine emission technology. However, the U.S. and Canada truck markets are being negatively impacted in the second quarter as the industry adjusts to higher-priced vehicles.”
“Class 8 industry retail sales in the U.S. and Canada are expected to be in the range of 110,000-140,000 vehicles in 2010, reflecting the uneven economy, particularly the continued low level of housing starts and auto production,” said Dan Sobic, PACCAR executive vice president. “The good news is that freight tonnage has increased modestly on a year-on-year basis in the last few months. Additionally, our customers’ profitability is benefiting from reasonable fuel prices and good availability of drivers. Truck retail sales are still below replacement demand levels, resulting in the North American truck fleet age of nearly seven years. The truck industry is generating slightly better parts and service business due to the aging fleet and higher tonnage.”
PACCAR expects to increase capital and research and development (R&D) investments in 2010 as the economy improves. Capital expenditures of $175-$200 million and R&D expenses of $225-$250 million are targeted for new products and enhancing operating efficiency.
“Kenworth, Peterbilt and DAF are investing in new industry-leading products and services to enable their customers to continue to deliver profitable results in their businesses,” said Tom Plimpton, PACCAR vice chairman.