Paccar’s 2Q profit climbs nearly 9.5%
The Bellevue truck maker said the results reflect improving truck sales in the U.S. and Canada, and strong aftermarket parts and financial-services worldwide.
Seattle Times business reporter
Bellevue-based truck maker Paccar reported an almost 9.5 percent increase in second-quarter earnings and record quarterly revenue from its Paccar parts division.
“Paccar’s second-quarter results reflect the benefits of improving truck sales in the U.S. and Canada and strong aftermarket parts and financial services worldwide,” Chief Executive Ron Armstrong said in a statement Tuesday.
The company also announced its plan to build a 176,000-square-foot distribution center in Renton to replace its current facility. The expansion will be built on Paccar’s Renton campus on Houser Way North and will double the distribution capacity for customers in the northwestern U.S. and Canada. The project is slated to start by the end of the year, according to a release.
Armstrong told analysts on Tuesday’s conference call the new building will not create additional jobs.
For the second quarter, the company reported a profit of $319.2 million, or 90 cents a share, up from $291.6 million, or 82 cents a share, in the same period a year ago. Sales and financial-services revenue totaled $4.57 billion compared with $4.3 billion last year. Truck sales brought in $3.46 billion in the second quarter — an almost 6 percent increase over the previous year.
Paccar parts generated $778 million in revenue, up nearly 10 percent over last year. Paccar said it has 16 parts-distribution centers that support more than 2,000 dealer locations for the company’s DAF, Kenworth and Peterbilt trucks.
As aging trucks continue to be replaced around the world, Paccar delivered 33,700 new trucks between April and June, a 6 percent increase over the first quarter this year, but a dip of nearly 3 percent from the 34,700 trucks delivered during the same quarter last year.
In the quarter ended June 30, Paccar sold 20,500 trucks in the U.S. and Canada, 8,900 in Europe and 4,300 to the rest of the world, Armstrong said.
“Looking ahead, we expect to increase truck deliveries in the third quarter by about 5 percent compared to the second quarter, reflecting the continued strength of the North American Class 8 market,” he said.
Because the European market traditionally has a summer shutdown for the industry, Armstrong said that increase is expected mostly out of North America.
Last year, the European market saw an increase in purchases of Euro 5 trucks before the more expensive Euro 6 hit the market. But Armstrong said customers are gradually adjusting to the increased price, and he expects demand for the new truck to increase as the European economy continues to improve, and freight activity increases.
Production of DAF trucks in the new Brazil factory is still ramping up, Armstrong said. The initial 20 distribution centers are expected to be complete by the end of the year, and the company hopes Brazil can be producing 10 trucks a day by 2015. The country is currently producing three.
During Tuesday’s earnings call, Armstrong also dismissed rumors that the company is engaged in talks with Germany’s Volkswagen.
“There have been no discussions with Volkswagen,” he said. “The company continues to focus on running the business day in and day out. We’ve got a great team and that is our focus.”
Paccar shares closed down $1.31, or 2 percent, at $63.50 Tuesday. It has sold as high as $68.81 in the past year.