October 28, 2014, Bellevue, Washington –
“PACCAR reported higher revenues and net income for the third quarter
of 2014,” said Ron Armstrong, chief executive
officer. “PACCAR’s third quarter results reflect the
benefits of strong truck sales in the U.S. and Canada, and excellent
aftermarket parts revenues and financial services results
worldwide. I am very proud of our 23,400 employees who have
delivered outstanding results to our shareholders and customers.”
PACCAR earned $371.4 million ($1.04 per diluted share) for the third quarter
of 2014, an increase of 20 percent compared to $309.4 million
($.87 per diluted share) earned in the third quarter of 2013. Third
quarter net sales and financial services revenues were a quarterly record of
$4.93 billion, a 15 percent increase compared to $4.30 billion in the third
quarter of 2013. For the first nine months of 2014, PACCAR reported
net income of $964.5 million ($2.71 per diluted share) compared to $837.1
million ($2.36 per diluted share) in 2013. Net sales and financial
services revenues for the first nine months of 2014 were $13.88 billion
compared to $12.52 billion last year.
“Our North American customers are benefiting from good economic growth,
record freight tonnage, improving freight rates and the excellent operating
efficiency of our new Kenworth and Peterbilt models in the on-highway and
construction markets,” noted Armstrong. “PACCAR’s
North American truck factories have increased build rates to meet strong
demand for our industry-leading Kenworth and Peterbilt Class 8
vehicles.”
Peterbilt Model 567 Construction Trucks
PACCAR Increases Stock Repurchases
PACCAR repurchased
581,355 of its common shares for $34.1 million during the third
quarter. The Board of Directors authorized $300 million of stock
repurchases, of which PACCAR has repurchased 5.6 million shares for $226.1
million. “PACCAR’s excellent net profits and strong cash
flow make the company’s shares an attractive long-term
investment. The stock repurchase program reflects the Board’s
confidence in PACCAR’s successful global business growth,” said
Bob Christensen, PACCAR president and chief financial officer.
Financial Highlights – Third Quarter 2014
Highlights
of PACCAR’s financial results for the third quarter of 2014 include:
- Record quarterly consolidated sales and revenues of $4.93 billion.
- Net income of $371.4 million, a 7.5 percent after-tax return on
revenues.
- Record PACCAR Parts quarterly revenues of $784.2 million.
- Record Financial Services quarterly pretax income of $96.9 million.
- Cash generated from operations of $760.8 million.
- Manufacturing cash and marketable securities of $2.86 billion.
- Medium-term note issuance of $300 million.
Financial Highlights – Nine Months 2014
Highlights
of PACCAR’s financial results for the first nine months of 2014
include:
- Consolidated sales and revenues of $13.88 billion.
- Net income of $964.5 million.
- PACCAR Parts revenues of $2.29 billion.
- Financial Services pretax income of $274.1 million.
- Cash generated from operations of $1.60 billion.
- Medium-term note issuances of $1.21 billion.
Global Truck Markets
“The U.S. and Canada truck
industry Class 8 retail sales are 17 percent higher year-to-date than last
year. Our customers are benefiting from good economic growth,
improving freight rates and lower fuel prices,” said Dan Sobic, PACCAR
executive vice president. “Many of our customers are
expanding their fleets, in addition to replacing older vehicles, which is
excellent news for the industry.” Class 8 industry retail sales
for the U.S. and Canada in 2014 are estimated to be in the range of
245,000-255,000 vehicles. Estimates for U.S. and Canada truck industry
Class 8 retail sales in 2015 are in the range of 240,000-270,000 units.
“Customers recognize DAF’s product quality leadership, low
operating costs and excellent resale value,” said Harrie Schippers,
DAF president. “Waberer’s International, one of
Europe’s largest transport companies, ordered 1,000 new DAF Euro 6 XF
and CF trucks at the IAA Commercial Vehicles exhibition in Hanover, Germany
in September.” Freight traffic in Germany has improved by three
percent, as measured by the Maut toll system. It is estimated that
industry sales in the above 16-tonne truck market in Europe will be in the
range of 210,000-220,000 units this year. The 2015 industry sales in
the above 16-tonne truck market in Europe are projected to be in the range
of 200,000-240,000 units.
Heavy-duty truck industry sales for South America in 2014 are projected to be
in the range of 140,000-150,000 vehicles. The 2015 heavy-duty truck
industry sales for South America are estimated to be in the range of
130,000-160,000 units. “The production of DAF trucks in Brasil
is enhancing PACCAR’s vehicle sales in South America. DAF
dealers are investing in the most modern distribution network in Brasil to
support our customers,” said Sam Means, PACCAR vice president.
PACCAR Parts Achieves Record Quarterly Revenues
PACCAR
Parts generated record quarterly revenues of $784.2 million for the third
quarter of 2014, a 10 percent increase compared to the $715.3 million
achieved in the third quarter of 2013. Third quarter 2014 pretax
income was $127.9 million, an increase of 20 percent compared to the $106.5
million earned in the third quarter last year. PACCAR Parts’
nine months revenues were up 10 percent to $2.29 billion compared to $2.09
billion for the same period last year. Pretax profit increased 18
percent to $366.7 million in the first nine months of 2014 compared to
$311.2 million in the same period of 2013.
“PACCAR Parts’ innovative marketing programs and improving fleet
utilization are contributing to excellent parts and service business,”
said David Danforth, PACCAR Parts general manager. “We are
pleased to announce the opening of a new parts distribution center in
Montreal, Canada. PACCAR Parts has 17 parts distribution centers
supporting over 2,000 DAF, Kenworth and Peterbilt dealer locations that
deliver industry-leading customer service.”
Capital Investments and Product Development
PACCAR’s
excellent long-term profits, strong balance sheet and intense focus on
quality have enabled the company to invest $5.8 billion in new PACCAR
assembly facilities, innovative products and new technologies during the
past decade. Capital investments of $225-$250 million and R&D
expenses of $205-$215 million in 2014 are delivering enhanced powertrains
and increased operating efficiency of PACCAR assembly facilities.
Capital expenditures for 2015 are projected to be $325-$375 million and
research and development expenses are estimated to be $200-$250
million, as PACCAR enhances its aftermarket support, manufacturing
facilities and product ranges.
PACCAR MX-11 Engine
Ireland Fleet Transport
Innovation Award Winner
PACCAR Enhances Environmental Leadership
PACCAR is an
environmental leader with its energy-efficient vehicles and manufacturing
facilities. PACCAR joined the CDP (formerly known as the Carbon
Disclosure Project) this year. The CDP’s climate change program
provides annual reports on companies’ progress in the development of
energy-efficient operations and environmentally friendly products and
services that protect and preserve the environment. “PACCAR
earned a score of 94 (out of 100). This is an excellent result and
reflects PACCAR’s commitment to environmental leadership,”
commented George West, PACCAR vice president.
PACCAR’s commitment to the environment is reflected in the
industry-leading fuel-efficiency of its trucks. The new Kenworth
T680 Advantage is Kenworth's most fuel-efficient truck.
The Kenworth T680 Advantage has a factory-installed
aerodynamic package and an optimized powertrain including the fuel-efficient
PACCAR MX-13 engine. “The Kenworth T680 Advantage improves
fuel economy up to five percent. Customers appreciate the positive
impact on their profits and the environment,” said Gary Moore,
Kenworth general manager and PACCAR vice president.
The Kenworth T680 Advantage Achieves
Five Percent Fuel Economy Improvement
Financial Services Companies Achieve Record Quarterly Results
PACCAR
Financial Services (PFS) has a portfolio of 163,000 trucks and trailers,
with total assets of $11.77 billion. PacLease, a major full-service
truck leasing company in North America and Europe with a fleet of over
37,000 vehicles, is included in this segment.
PFS profit increased due to higher asset balances and excellent portfolio
performance during the third quarter and first nine months of 2014.
PFS third quarter pretax income achieved a record $96.9 million compared to
$88.2 million earned in the third quarter of 2013. Third quarter 2014
revenues were $305.9 million
compared to $293.5 million in the same quarter of 2013. For the
nine-month period, Financial Services pretax income was $274.1 million
compared to $249.8 million last year. Nine-month revenues were $902.2
million compared with $875.4 million for the same period a year ago.
“Dealers and customers appreciate PFS providing leading-edge
technology solutions, excellent customer service and dedicated support to
the transportation industry,” said Bob Bengston, PACCAR senior vice
president.
“PACCAR’s strong balance sheet, complemented by its A+/A1 credit
ratings, enables PFS to offer competitive retail financing to Kenworth,
Peterbilt and DAF dealers and customers,” said Todd Hubbard, PACCAR
Financial president. “A growing asset base and robust portfolio
performance are generating strong earnings. We have excellent access
to the commercial paper and medium-term note markets, allowing PFS to
profitably support the sale of PACCAR trucks in 23 countries on four
continents.”
PACCAR is a global technology leader in the design, manufacture and customer
support of high-quality light-, medium- and heavy-duty trucks under the
Kenworth, Peterbilt and DAF nameplates. PACCAR also designs and
manufactures advanced diesel engines, provides financial services and
information technology, and distributes truck parts related to its principal
business.
PACCAR will hold a conference call with securities analysts to discuss third
quarter earnings on October 28, 2014, at 9:00 a.m. Pacific time.
Interested parties may listen to the call by selecting “Q3
Webcast” at PACCAR’s homepage. The Webcast will be
available on a recorded basis through November 4, 2014. PACCAR shares
are listed on NASDAQ Global Select Market, symbol PCAR, and its homepage can
be found at www.paccar.com.
This release contains “forward-looking statements” within the
meaning of the Private Securities Litigation Reform Act. These
statements are based on management’s current expectations and are
subject to uncertainty and changes in circumstances. Actual results
may differ materially from those included in these statements due to a
variety of factors. More information about these factors is contained
in PACCAR’s filings with the Securities and Exchange Commission.