“PACCAR achieved good quarterly revenues and net income in the second quarter of 2020,” said Preston Feight, CEO. “PACCAR closed its factories for five weeks at the beginning of the quarter and has gradually resumed production while enhancing operating processes and procedures for employee health and well-being, manufacturing efficiency and customer satisfaction. I am very proud of our outstanding employees who delivered excellent production and distribution performance while enhancing PACCAR’s rigorous health and safety standards.”
PACCAR earned net income of $147.7 million ($.43 per diluted share) in the second quarter, compared to $619.7 million ($1.78 per diluted share) earned in the same period last year. Second quarter net sales and financial services revenues were $3.06 billion, compared to $6.63 billion achieved in the second quarter of 2019.
“PACCAR’s truck production and PACCAR Parts’ aftermarket sales steadily increased as the quarter progressed. PACCAR’s quarterly profits are a direct result of its proven business model: premium trucks and transportation solutions, flexible manufacturing processes, a strong balance sheet, and rigorous cost control while maintaining R&D and capital investments that drive long-term growth,” added Feight.
PACCAR reported first half net income of $507.1 million ($1.46 per diluted share), compared to $1.25 billion ($3.59 per diluted share) earned in the first six months of last year. Net sales and financial services revenues for the first six months of 2020 were $8.22 billion, compared to $13.12 billion achieved last year.
Quarterly Dividend Announcement
“PACCAR is in excellent financial position, with manufacturing cash and marketable securities of $4.17 billion at June 30, 2020, and bank facilities of $3.0 billion,” shared Mark Pigott, executive chairman. The company has credit ratings of A+/A1.
PACCAR’s board of directors declared a regular quarterly cash dividend of thirty-two cents ($.32) per share, payable on September 1, 2020, to stockholders of record at the close of business on August 11, 2020.
Financial Highlights – Second Quarter 2020
Highlights of PACCAR’s financial results for the second quarter of 2020 include:
• Net sales and revenues of $3.06 billion.
• Net income of $147.7 million.
• Global truck deliveries of 18,100 units.
• PACCAR Parts revenues of $823.7 million.
• PACCAR Parts pre-tax income of $151.9 million.
• Financial Services pre-tax income of $55.5 million.
• Manufacturing cash and marketable securities of $4.17 billion.
• Cash generated from operations of $934.9 million.
• Stockholders’ equity of $9.78 billion.
Financial Highlights – First Half 2020
Highlights of PACCAR’s financial results for the first six months of 2020 include:
• Net sales and revenues of $8.22 billion.
• Net income of $507.1 million.
• Capital investments of $308.8 million and R&D expenses of $137.5 million.
• Financial Services pre-tax income of $103.8 million.
• Cash generated from operations of $1.36 billion.
• Medium-term note issuances of $1.33 billion.
Global Truck Markets
“The U.S. and Canada Class 8 truck market is rebounding as state and local economies re-open,” said Mike Dozier, senior vice president. “Customers benefited from lower fuel costs, and many sectors experienced higher freight volumes and improved freight pricing as the quarter progressed. Class 8 truck industry orders in June were 28% higher than June last year.” Class 8 truck industry retail sales in the U.S. and Canada are estimated to be in a range of 160,000-190,000 trucks in 2020, though the market size and economy could be impacted if there was a resurgence of COVID-19. Peterbilt and Kenworth achieved U.S. and Canada Class 8 truck retail sales market share of 29.6% through June this year, compared to 29.1% during the same period last year.
Harry Wolters, DAF president, said, “Customer demand for fuel-efficient DAF XF, CF and LF trucks bounced back in May and June as the European economies improved.” European truck industry registrations in the above 16-tonne market are estimated to be in a range of 190,000-220,000 vehicles this year.
The South American above 16-tonne truck market is projected to be in a range of 60,000-80,000 trucks in 2020. “Customers appreciate the durability and reliability of DAF trucks in Brasil, which is one of the most demanding operating environments in the world,” said Mike Kuester, assistant vice president of South America. “DAF achieved a record 9.1% market share in the Brasil above 40-tonne truck segment in the first half of this year.”
PACCAR Parts Achieves Good Quarterly Revenues and Pre-Tax Profit
PACCAR Parts achieved good quarterly revenues of $823.7 million in the second quarter of 2020, compared to $1.03 billion achieved in the same period last year. Second quarter 2020 pre-tax profit was $151.9 million, compared to $210.6 million achieved in the second quarter of 2019. PACCAR Parts first half 2020 revenues were $1.82 billion, compared to $2.03 billion in the same period last year. PACCAR Parts achieved pre-tax profit of $366.6 million in the first six months of 2020, compared to $418.2 million earned in the first six months of 2019.
David Danforth, PACCAR vice president and PACCAR Parts general manager, said, “Some customers deferred vehicle maintenance during the quarter, which impacted parts purchases. The stronger economy and higher truck traffic in June increased demand for aftermarket services.”
Jim Walenczak, PACCAR Parts assistant general manager, noted, “PACCAR Parts has invested in its e-commerce platform for many years, which benefits our customers and dealers. PACCAR Parts’ global e-commerce retail sales increased 20% in the first half of 2020 compared to the same period last year.” PACCAR continues to add global distribution capacity to deliver industry-leading aftermarket parts availability to its customers. PACCAR’s new 250,000 square-foot distribution center in Las Vegas, Nevada and new 160,000 square-foot distribution center in Ponta Grossa, Brasil opened during the second quarter.