Paccar Q1 profit rises 16 percent
Stronger U.S. truck sales boosted results at Bellevue-based truck maker Paccar.
Seattle Times business reporter
Bellevue-based truck-maker Paccar reported a 16 percent increase in first-quarter profit due to higher truck sales.
With 31,800 trucks delivered between January and March, a 4 percent increase over last year’s first quarter, Paccar’s new Chief Executive Ron Armstrong said he expects 2014 to keep getting better.
“The improvement reflects increased truck deliveries in the U.S. and Canada due to the ongoing replacement of the aging truck population and improving construction and automotive sectors,” Armstrong said during a Tuesday conference call with analysts. “Looking ahead, we expect increased truck deliveries in the second quarter by 8 percent to 10 percent compared to the first quarter.”
Paccar sold 18,600 trucks in U.S. and Canada, compared with 9,300 sold in Europe and 3,900 across other countries, Armstrong said.
“We’ve seen customers being very prudent in their purchasing habits over the last two years or three years, as there’s been uncertainty,” Armstrong said. “I think people feel better about the ability to support keeping their trucks active and being able to get fair rates for their business.”
For the year, Paccar expects to sell 220,000 to 240,000 trucks, compared with 212,000 sold last year.
It reported a net income of $273.9 million, or 77 cents a share, up from $236.1 million, or 67 cents a share, the same period the year before. Sales and financial-services revenue were $4.38 billion compared with $3.92 billion last year. Truck sales amount to $3.32 billion in the first quarter — a 13 percent increase over the previous year.
Armstrong said the new DAF Euro 6 trucks in Europe that are replacing the Euro 5 come with a 15 percent price increase. As the transition to the new vehicle continues and production becomes more efficient, he said, profit from those trucks will rise.
Production levels of DAF trucks in the new Brazil factory are expected to increase gradually through 2014. However, Robert Christensen, president and chief financial officer of Paccar, said it will take time for production and distribution in the country to have an impact on earnings for the company.
“We have 20 dealer locations in Brazil, and they’re all beginning to sell both trucks and parts, but it’s going to be a slow ramp-up over the next several quarters, if not years,” he said.
Paccar says the company has earned a net profit for 75 consecutive years and has paid a dividend every year since 1941.
The company on Tuesday announced an increase of two cents to the regular quarterly cash dividend, raising it to 22 cents per share.
Paccar shares closed Tuesday at $63.50, down $2.31 or 3.5 percent.
Coral Garnick: 206-464-2422 or firstname.lastname@example.org. On Twitter @coralgarnick