“PACCAR (Nasdaq: PCAR) achieved good quarterly revenues and net
income in the second quarter of 2020,” said Preston Feight, chief
executive officer. “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.”
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PACCAR Engine Factory, Columbus,
Mississippi (Photo: Business Wire)
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.
Kenworth, Peterbilt and DAF to Produce Battery-Electric
Vehicles
Kenworth, Peterbilt and DAF continue to be global leaders in
zero emissions vehicles, with customers presently field testing
more than 60 battery electric, hydrogen fuel cell and hybrid trucks
in North America and Europe. Deliveries of PACCAR battery electric
production model trucks are expected to begin in 2021.
“Industry zero emissions powertrain deliveries are expected to
be modest over the next several years due to the high cost of the
technology,” said Kyle Quinn, PACCAR chief technology officer.
“Medium-term demand for zero emissions vehicles will be primarily
in refuse, port and local delivery applications which do not
require long distance travel or a network of refueling
infrastructure, as well as in locations with government mandated
zero emissions.”
PACCAR has partnered with industry-leading companies to supply
components and charging infrastructure that are being integrated
into PACCAR’s proprietary vehicle electronics architecture.
“PACCAR is leading the industry in developing hydrogen fuel cell
powered Class 8 trucks,” said Kevin Baney, PACCAR vice president
and Kenworth general manager. Kenworth is delivering 10 hydrogen
fuel cell Kenworth T680 trucks to several customers for field
testing in the Port of Los Angeles. Kenworth integrated Toyota fuel
cell technology with the Kenworth T680, and Shell provided hydrogen
fuel and infrastructure. The trucks were produced at the Kenworth
truck factory in Renton, Washington, and the PACCAR Technical
Centers are providing extensive performance testing.
Peterbilt has developed three application-specific battery
electric truck models, and many of these vehicles are accumulating
test miles with customers. Jason Skoog, PACCAR vice president and
Peterbilt general manager, commented, “Peterbilt Model 579EV trucks
are deployed in port and regional haul applications; Peterbilt
Model 220 trucks are being utilized in medium-duty pickup and
delivery applications; and Peterbilt Model 520EVs are collecting
and hauling refuse.”
DAF has developed a range of electric and hybrid vehicles that
are undergoing extensive field testing by customers in a variety of
applications in Europe. “The DAF CF Electric is used in regional
haul and refuse applications; the DAF LF Electric is ideal for
local delivery; and the DAF CF Hybrid is designed for long haul
with the capability to also operate in cities with zero emissions
requirements,” said Ron Borsboom, DAF executive director of product
development.
Capital Investments and Research and Development
PACCAR’s excellent long-term profits, strong balance sheet, and
consistent focus on quality, technology and productivity have
enabled the company to invest $7.1 billion in new and expanded
facilities, innovative products and new technologies during the
past decade. “PACCAR takes a disciplined approach to capital
investments and R&D projects, investing for long-term growth in
aerodynamic truck models, diesel and zero emissions powertrain
technologies, advanced driver assistance systems, connected vehicle
services, next-generation manufacturing and distribution
capabilities. We estimate capital investments to be in a range of
$525-$575 million, and research and development expenses to be in a
range of $265-$295 million,” noted Darrin Siver, senior vice
president.
Financial Services Companies Achieve Good Results
PACCAR Financial Services (PFS) has a portfolio of 202,000
trucks and trailers, with total assets of $15.05 billion. PACCAR
Leasing (PacLease), a major full-service truck leasing company, is
included in this segment. Second quarter PFS pre-tax income in 2020
was $55.5 million compared to $80.3 million earned in the second
quarter last year. Second quarter 2020 revenues were $360.3 million
compared to $361.4 million achieved in the same quarter of 2019.
For the first six months of 2020, PFS earned pre-tax income of
$103.8 million compared to $164.3 million last year. First-half
2020 revenues were $744.0 million compared with $710.9 million for
the same period a year ago. “PFS’ portfolio performed well during
the second quarter of 2020,” said Todd Hubbard, PACCAR vice
president. “The used truck market is experiencing lower vehicle
resale values. PACCAR Financial is investing in worldwide used
truck retail centers to sell an increased number of used trucks at
retail prices, which enhances used truck sales margins. PFS
recently opened used truck centers in Denton, Texas, and Prague,
Czech Republic, and plans to open a used truck facility in Madrid,
Spain.”
“PACCAR’s excellent balance sheet, complemented by its A+/A1
credit ratings, enables PFS to offer competitive retail financing
to Kenworth, Peterbilt and DAF dealers and customers in 26
countries on four continents,” said Craig Gryniewicz, PACCAR
Financial Corp. president. “We have excellent access to the
commercial paper and medium-term note markets, allowing PFS to
profitably support the sale of PACCAR trucks.”
PacLease Celebrates 40th Anniversary
PacLease is celebrating its 40th anniversary this year. PacLease
has a fleet of 38,300 vehicles, and operates in 587 locations
throughout the United States, Canada, Mexico, Germany and
Australia. PacLease provides best in class customer service,
maximum vehicle uptime and customized transportation solutions by
utilizing premium quality Kenworth, Peterbilt and DAF trucks.
PacLease’s transportation solutions include full truck maintenance,
telematics, driver training, regulatory compliance, toll discounts
and fuel management.
“PacLease customers are usually private fleets whose primary
businesses rely on trucks to transport their products,” said Ken
Roemer, PacLease president. “PacLease’s full service leasing
solutions simplify the transportation of customers’ products,
allowing customers to focus on their core business.”
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 powertrains, 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 second quarter earnings on July 21, 2020, at 9:00 a.m.
Pacific time. Interested parties may listen to the call by
selecting “Q2 Earnings Webcast” at PACCAR’s homepage. The Webcast
will be available on a recorded basis through July 28, 2020. PACCAR
shares are listed on NASDAQ Global Select Market, symbol PCAR. Its
homepage is 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.
PACCAR Inc
SUMMARY STATEMENTS OF
OPERATIONS
(in millions except per share
amounts)
Three Months Ended
Six Months Ended
June 30
June 30
2020
2019
2020
2019
Truck, Parts and Other: Net sales and revenues
$
2,701.9
$
6,266.5
$
7,479.9
$
12,404.6
Cost of sales and revenues
2,441.5
5,341.7
6,631.1
10,558.8
Research and development
66.5
82.5
137.5
160.8
Selling, general and administrative
93.9
139.8
225.3
276.7
Interest and other (income), net
(19.5
)
(9.8
)
(32.6
)
(20.1
)
Truck, Parts and Other Income Before Income Taxes
119.5
712.3
518.6
1,428.4
Financial Services: Revenues
360.3
361.4
744.0
710.9
Interest and other
271.0
243.6
556.8
474.4
Selling, general and administrative
26.3
33.5
58.9
66.0
Provision for losses on receivables
7.5
4.0
24.5
6.2
Financial Services Income Before Income Taxes
55.5
80.3
103.8
164.3
Investment income
9.0
21.8
23.8
41.1
Total Income Before Income Taxes
184.0
814.4
646.2
1,633.8
Income taxes
36.3
194.7
139.1
385.1
Net Income
$
147.7
$
619.7
$
507.1
$
1,248.7
Net Income Per Share: Basic
$
.43
$
1.79
$
1.46
$
3.60
Diluted
$
.43
$
1.78
$
1.46
$
3.59
Weighted Average Shares Outstanding: Basic
346.4
347.0
346.7
347.1
Diluted
346.8
347.7
347.1
347.8
Dividends declared per share
$
.32
$
.32
$
.64
$
.64
PACCAR Inc CONDENSED BALANCE SHEETS (in millions)
June 30
December 31
2020
2019
ASSETS Truck, Parts and Other: Cash and marketable
debt securities
$
4,167.3
$
5,169.4
Trade and other receivables, net
1,248.3
1,306.1
Inventories, net
1,136.4
1,153.2
Property, plant and equipment, net
3,025.0
2,883.8
Equipment on operating leases and other, net
1,781.8
1,777.2
Financial Services Assets
15,047.6
16,071.4
$
26,406.4
$
28,361.1
LIABILITIES AND STOCKHOLDERS' EQUITY Truck, Parts
and Other: Accounts payable, deferred revenues and other
$
4,969.5
$
6,013.1
Financial Services Liabilities
11,660.1
12,641.9
STOCKHOLDERS' EQUITY
9,776.8
9,706.1
$
26,406.4
$
28,361.1
Common Shares Outstanding
345.8
346.3
PACCAR Inc CONDENSED CASH FLOW STATEMENTS (in
millions) Six Months Ended June 30
2020
2019
OPERATING ACTIVITIES: Net income
$
507.1
$
1,248.7
Depreciation and amortization: Property, plant and equipment
122.4
162.6
Equipment on operating leases and other
390.9
357.7
Net change in trade receivables, inventory and payables
(218.3
)
(187.7
)
Net decrease (increase) in wholesale receivables on new trucks
694.7
(321.0
)
All other operating activities, net
(136.0
)
(70.8
)
Net Cash Provided by Operating Activities
1,360.8
1,189.5
INVESTING ACTIVITIES: Payments for property, plant
and equipment
(312.2
)
(249.9
)
Acquisitions of equipment for operating leases
(439.6
)
(660.4
)
Net increase in financial services receivables
(113.9
)
(426.5
)
Net decrease (increase) in marketable debt securities
11.7
(87.8
)
Proceeds from asset disposals and other
259.9
299.2
Net Cash Used in Investing Activities
(594.1
)
(1,125.4
)
FINANCING ACTIVITIES: Payments of cash dividends
(1,018.0
)
(917.0
)
Purchases of treasury stock
(41.6
)
(56.5
)
Proceeds from stock compensation transactions
11.3
23.9
Net (decrease) increase in debt and other
(730.1
)
667.6
Net Cash Used in Financing Activities
(1,778.4
)
(282.0
)
Effect of exchange rate changes on cash
(35.4
)
1.4
Net Decrease in Cash and Cash Equivalents
(1,047.1
)
(216.5
)
Cash and cash equivalents at beginning of period
4,175.1
3,435.9
Cash and cash equivalents at end of period
$
3,128.0
$
3,219.4
PACCAR Inc SEGMENT AND OTHER INFORMATION (in
millions) Three Months Ended Six Months Ended June 30 June
30
2020
2019
2020
2019
Sales and Revenues: Truck
$
1,858.4
$
5,211.9
$
5,616.0
$
10,319.2
Parts
823.7
1,025.4
1,822.3
2,030.1
Financial Services
360.3
361.4
744.0
710.9
Other
19.8
29.2
41.6
55.3
$
3,062.2
$
6,627.9
$
8,223.9
$
13,115.5
Pretax (Loss) Profit: Truck
$
(46.2
)
$
510.7
$
136.9
$
1,027.7
Parts
151.9
210.6
366.6
418.2
Financial Services
55.5
80.3
103.8
164.3
Investment Income and Other
22.8
12.8
38.9
23.6
$
184.0
$
814.4
$
646.2
$
1,633.8
GEOGRAPHIC REVENUE (in millions) Three Months
Ended Six Months Ended June 30 June 30
2020
2019
2020
2019
United States and Canada
$
1,845.9
$
4,291.3
$
5,176.0
$
8,413.1
Europe
857.9
1,571.0
2,118.0
3,245.3
Other
358.4
765.6
929.9
1,457.1
$
3,062.2
$
6,627.9
$
8,223.9
$
13,115.5
NEW TRUCK DELIVERIES Three Months Ended Six
Months Ended June 30 June 30
2020
2019
2020
2019
United States and Canada
9,300
30,000
31,500
58,900
Europe
6,400
15,700
18,000
32,600
Other
2,400
6,600
7,000
12,300
18,100
52,300
56,500
103,800
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200721005312/en/
Ken Hastings (425) 468-7530 ken.hastings@paccar.com
PACCAR (NASDAQ:PCAR)
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