BELLEVUE, WA — PACCAR Inc. has reported record revenues and net income for 2005. The company also earned its highest quarterly profit in its 100-year history, according Mark Pigott, chairman and CEO.
“These outstanding results are especially noteworthy as the company celebrated its Centennial anniversary in 2005,” said Pigott. “PACCAR has achieved 67 consecutive years of net profitability and has enhanced its distinguished reputation as one of the leading global technology companies. The strength of the company is a direct reflection of the unparalleled innovation and dedication of our 21,900 employees worldwide.”
PACCAR earned a record $312.9 million ($1.83 per diluted share) for the fourth quarter 2005, which was an increase of 30 percent compared to the $241.4 million ($1.38 per diluted share) earned in the fourth quarter of 2004. Fourth quarter net sales and financial service revenues were a quarterly record of $3.64 billion, 14 percent higher than the $3.19 billion reported for the comparable period in 2004. The company’s 2005 fourth quarter after-tax return on revenue (ROR) was 8.6 percent — equaling the record established in the third quarter of 2005.
Consolidated net sales and financial service revenues for full-year 2005 were a record $14.06 billion, an increase of 23 percent from $11.40 billion in 2004. Yearly net income in 2005 of $1.13 billion ($6.56 per diluted share) increased 25 percent over 2004 earnings of $906.8 million ($5.16 per diluted share). Included in PACCAR’s 2005 net income is a one-time charge of $64 million (37 cents per diluted share) for income taxes associated with the repatriation of $1.5 billion from its subsidiaries outside the U.S. Dividends of $2.87 per share were declared during 2005, including a special dividend of $2. PACCAR’s dividend yield of 3.9 percent places it in the top 50 companies in the S&P 500.
“PACCAR’s balanced global diversification, world-class information technology, growing financial service companies and superior quality products have generated excellent financial returns,” noted Pigott. “PACCAR continues to benchmark and enhance its core competencies based on the strong results generated by excellent companies such as Microsoft, Dell, Toyota, Illinois Tool Works and Wells Fargo. PACCAR’s profitability has enabled it to systematically increase its technology investment in all facets of the business, including product design and development, customer sales, supply chain management, manufacturing and assembly, finance, leasing and aftermarket support programs.
These investments have kept PACCAR well ahead of the competition and have highlighted PACCAR as a strong growth company in several industry segments: capital goods, financial services and logistics. The company’s 10-year compound annual growth rate (CAGR) in revenues is 11 percent and profit is 16 percent, significantly higher than the company’s peer group and the S&P 500.”
PACCAR’s return on beginning shareholder equity (ROE) was 30.1 percent in 2005 compared with 27.9 percent in 2004. Total shareholder return has exceeded the Standard & Poor’s 500 Index for the previous three-, five- and 10-year time periods, averaging 27.1 percent per year for the last 10 years. PACCAR has paid a dividend every year since 1941 and dividends per share have increased 345 percent over the last four years. PACCAR’s excellent credit rating of AA- from Standard & Poor’s gives PACCAR Financial a competitive advantage by lowering borrowing costs in the capital markets.
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