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Paccar Inc. posted lower fourth-quarter net income and revenue while achieving record quarterly parts revenue and notching its record market share for its medium-duty vehicles sold in the U.S. and Canada.
Net income for the quarter ended Dec. 31 was $405.8 million ($1.17 per diluted share) compared with $531.3 million ($1.53) a year earlier.
Revenue reached $5.57 billion in the quarter compared with $6.12 billion in the 2019 period.
“Paccar’s performance benefited from a recovery in truck demand to normal levels in the second half of the year and strong performance from our trucks, parts and financial services divisions,” CEO Preston Feight said during the earnings call.
Analysts viewed the results as an overall strong performance with a slight miss in earnings per share.
Activity in the U.S. and Canada contributed $3.3 billion in revenue. Europe accounted for $1.6 billion.
In the quarter, truck sales revenue fell to $4 billion compared with $4.7 billion a year earlier.
Paccar Parts contributed 19% of the company’s total quarterly revenue, or $1.07 billion. It also posted record quarterly pretax income of $222.5 million that was an 8% increase compared with the same period last year.
“E-commerce, of course, has been the fastest growing segment within Paccar Parts, 25%,” Chief Financial Officer Harrie Schippers said, “and engine parts is a good second with a 13% growth year-over-year. I think those are trends that we expect to continue going forward.”
Meanwhile, Paccar delivered 40,800 trucks during the fourth quarter compared with 36,000 in the third quarter and 45,700 in Q4 a year earlier. For the first quarter of 2021, it forecast deliveries to be 10% higher than the fourth quarter due to stronger markets and higher customer demand.
The combined share of its Kenworth and Peterbilt brands of U.S. and Canada Class 8 retail sales was 30.1%.
“A strong rebound in manufacturing, housing starts, automotive production and consumer spending in the second half of 2020 resulted in good freight tonnage and robust demand for Kenworth and Peterbilt trucks. Class 8 truck industry retail sales in the U.S. and Canada were 216,500 units in 2020. Kenworth and Peterbilt achieved market share of 30.1%,” Darrin Siver, Paccar senior vice president, said in a release.
Kenworth and Peterbilt increased their combined U.S. and Canada medium-duty retail sales market share to a record 22.6%, according to the Bellevue, Wash.-based company.
Paccar increased its estimate of 2021 U.S. and Canada Class 8 truck industry retail sales to a range of 250,000 to 280,000 trucks compared with 216,500 in 2020.
Paccar also manufactures its DAF brand of heavy-duty trucks in Europe.
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The company reported the percentage of Paccar truck sales financed by its financial services increased to 28% from 25% last year.
Quarterly revenue at its financial services unit increased to $432.6 million compared with $406.3 million a year earlier.
Across Paccar, last year the company invested $570 million in capital investments and $274 million in research and development. In 2021, it is planning to increase capital investments to the range of $575 million to $625 million, and R&D expenses will grow to be in the range of $350 million to $375 million.
“This capital and R&D projects will develop the next generation of fuel-efficient diesel powertrains, zero-emissions vehicles as well as advanced driver assistance systems, autonomous vehicles, connected services and cutting-edge manufacturing capabilities,” Schippers said.
New product announcements are expected soon.
“We have a lot of great things happening right now in the company in terms of new product introductions that we’ll see this year,” Feight said, adding that some of that R&D spending is in support of those products.
Annual net income was $1.3 billion ($3.74) compared with $2.39 billion ($6.87) in 2019.
Annual revenue was $18.73 billion compared with $25.6 billion in 2019.
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