Truck Sales Boost Paccar’s 4Q, 2010 Earnings

Paccar reported increased earnings and revenue in the fourth quarter last year as well as for all of 2010, in no small part based on improving truck sales – an improvement expected to continue into 2011, the company noted.

Paccar said it earned $169.8 million on $3.06 billion in net sales and financial service revenues in the fourth quarter last year, compared to $46.1 million and $2.24 billion, respectively, during the same period in 2009. For all of 2010, the company said net income topped $457.6 million on $10.29 billion in net sales and financial service revenues, compared to $111.9 million and $8.09 billion, respectively, in 2009.

Paccar added that net income for its fourth quarter and full year 2010 results benefited from a gain on the sale of the company’s Nashville plant of $5.1 million ($3.2 million net of tax) and the favorable effect of recent U.S. tax law changes of $5 million.

Much of that fiscal improvement is due in large measure to growing truck sales in Europe, Canada, and the U.S., the company noted.

“Industry sales above 15-tonnes in Western and Central Europe were 183,000 units in 2010, a 9% increase compared to 2009,” said Harrie Schippers, president of DAF, Paccar’s European truck manufacturing subsidiary. “It is estimated that industry sales in the above 15-tonne truck market in Europe in 2011 will be in a range of 220,000-240,000 units.”

“Class 8 industry retail sales in the U.S. and Canada were 126,000 in 2010 compared to 108,000 in 2009, reflecting the slowly improving economy, which has been negatively impacted by high unemployment and low housing starts,” added Dan Sobic, Paccar’s executive vp.

“[But] our customers’ profitability is benefiting from continued increases in freight rates and volumes,” he noted. “Industry retail sales in 2011 are expected to increase to a range of 180,000-200,000 vehicles, reflecting a continued economic recovery and the need to replace an aging truck population. This projected sales level is still below normal replacement demand of approximately 225,000 units.”

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