Paccar Reports Profitable Second Quarter, Losses Year-to-Date
Paccar Inc. reported net income rose by $34 million in the second quarter as revenues declined amid fewer new truck deliveries.
Also, net income and revenues declined for the first six months, during which time the company and European regulators settled charges of price fixing.
Net income for the quarter ended June 30 rose to $481 million, or $1.37, compared with $447 million, or $1.26, a year earlier.
Revenue fell to $4.4 billion from $5 billion in the 2015 period.
North American deliveries fell by 7,000 trucks in the quarter to 19,800 from 26,800 in the 2015 period, the company said.
Paccar is the parent of North American brands Peterbilt Motors Co. and Kenworth Truck Co. and the overseas brand DAF Trucks. The company expressed optimism about its return on investments going forward.
Paccar is “earning excellent returns on its investments, achieving nearly 20% average annual after-tax return on equity over the last six years," Paccar CEO Ron Armstrong said in a statement. "These investments have included new Kenworth, Peterbilt and DAF vehicles, production of the fuel-efficient Paccar MX engines in North America, the DAF Brazil truck factory and increased capacity of parts distribution centers.
"In addition, the company expanded Paccar Financial Services internationally and introduced many industry-leading technologies and services for our dealers and customers.”
Also Peterbilt and Kenworth are benefiting from the third-best U.S. and Canada Class 8 truck market in the past 10 years and have achieved 27% market share year-to-date, the company said.
Nonetheless, Class 8 truck industry retail sales for the United States and Canada in 2016 are expected to be in a range of 220,000 to 240,000 vehicles [down from 220,000 to 250,000 previously], according to Paccar.
That represents “a 2% decrease at the midpoint and a 17% decline compared to the 278,000 units in 2015,” Credit Suisse analyst Jamie Coo wrote in a note to investors.
Paccar said year-to-date net income dropped as a result of an $833 million fine against the company by European regulators. The investigation was related to now-settled price-fixing charges against DAF and other European truck manufacturers including Daimler AG and Volvo Group.
Paccar reported a net loss of $113 billion, or 32 cents, compared with net income of $825 billion, or $2.32, in the prior-year period.
Revenue in the six-month period slipped to $8.1 billion from $9.3 billion in the 2015 period.
Deliveries fell about 13,000 units in the six-month period to 38,300 compared with 51,200 a year earlier.
