Rebound in Truck
Deliveries and Aftermarket Sales Drive Results
“PACCAR (Nasdaq: PCAR) reported strong revenues and net income
for the third quarter of 2020,” said Preston Feight, chief
executive officer. “PACCAR’s third quarter results reflect
rebounding global truck production and aftermarket parts revenue. I
am very proud of our outstanding employees who delivered these
results while employing the highest commitment to health and safety
at all PACCAR facilities.”
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Peterbilt Model 220EV Electric Truck
(Photo: Business Wire)
PACCAR achieved net income of $385.5 million ($1.11 per diluted
share) in the third quarter of this year, compared to $607.9
million ($1.75 per diluted share) earned in the same period last
year. Third quarter revenues were $4.94 billion, compared to $6.37
billion reported in the third quarter of 2019.
PACCAR earned $892.6 million ($2.57 per diluted share) for the
first nine months of 2020 compared to $1.86 billion ($5.34 per
diluted share) in the same period last year. Net revenues for the
first nine months of 2020 were $13.16 billion compared to $19.48
billion last year.
PACCAR’s truck deliveries doubled in the third quarter compared
to the second quarter of this year. PACCAR Parts’ excellent
aftermarket sales and profits surpassed the strong results in the
third quarter of 2019. PACCAR Financial Services achieved robust
new financing business and sold a record number of used trucks.
Peterbilt, Kenworth and DAF announced production availability of
their battery electric trucks.
PACCAR Dividends
PACCAR’s Board of Directors declared a regular quarterly cash
dividend of thirty-two cents ($.32) per share, payable on December
1, 2020, to stockholders of record at the close of business on
November 10, 2020. “PACCAR retained its strong dividend reflecting
the company’s ongoing excellent business performance,” said Mark
Pigott, PACCAR executive chairman.
Financial Highlights – Third Quarter 2020
Highlights of PACCAR’s financial results for the third quarter
of 2020 include:
- Net sales and revenues of $4.94 billion.
- Net income of $385.5 million.
- Global truck deliveries of 36,000 units.
- PACCAR Parts revenues of $1.02 billion.
- PACCAR Parts pre-tax income of $210.2 million.
- Financial Services pre-tax income of $55.5 million.
- Manufacturing cash and marketable securities of $4.41
billion.
- Cash generated from operations of $831.7 million.
- Stockholders’ equity of $10.18 billion.
Financial Highlights – Nine Months 2020
Highlights of PACCAR’s financial results for the first nine
months of 2020 include:
- Net sales and revenues of $13.16 billion.
- Net income of $892.6 million.
- Financial Services pre-tax income of $159.3 million.
- Capital investments of $438.8 million and R&D expenses of
$202.2 million.
- Cash generated from operations of $2.19 billion.
- Medium-term note issuances of $1.89 billion.
Global Truck Markets
PACCAR is increasing its estimate of U.S. and Canada Class 8
truck industry retail sales to a range of 190,000-210,000 vehicles
in 2020. Class 8 truck industry retail sales for 2021 are estimated
to be in a range of 210,000-250,000 vehicles. “U.S. economic growth
is being led by manufacturing, housing starts, automotive
production and consumer spending,” said Darrin Siver, PACCAR senior
vice president. “U.S. and Canada Class 8 truck industry orders
through September were 18% higher than in the same period last
year.”
“Customer demand for fuel-efficient DAF XF, CF and LF trucks
continued to strengthen in the third quarter as the European
economies improved,” said Harry Wolters, DAF president. “We are
raising our estimates for European truck industry registrations in
the above 16-tonne segment to be in the range of 210,000-230,000
units this year. The 2021 truck market is expected to be in the
range of 230,000-270,000 trucks.” The DAF XF truck was recently
honored at the Motor Transport Awards in the United Kingdom as the
“Fleet Truck of the Year 2020.” The judges noted the DAF XF truck’s
low operating costs, superior driver comfort and excellent
aftersales support.
DAF Brasil achieved a record 9.3% market share in the Brasil
above 40-tonne truck segment this year. “DAF Brasil introduced a
new DAF XF truck this year, which has been well-received by
customers,” said Mike Dozier, senior vice president. “We are
increasing our estimate for the 2020 South American above 16-tonne
truck market to be in a range of 75,000-85,000 vehicles this year,
and in a range of 95,000-105,000 trucks in 2021.”
PACCAR Parts Achieves Excellent Revenues and Pre-Tax
Profits
PACCAR Parts achieved pre-tax profit of $210.2 million in the
third quarter of 2020, compared to $207.4 million earned in the
third quarter of 2019. Third quarter 2020 revenues were $1.02
billion, compared to the $1.0 billion achieved in the third quarter
last year. PACCAR Parts achieved pre-tax profit of $576.8 million
in the first nine months of 2020, compared to $625.6 million in the
first nine months of 2019. PACCAR Parts’ nine-month revenues were
$2.84 billion, compared to $3.03 billion for the same period last
year. David Danforth, PACCAR vice president and PACCAR Parts
general manager, noted, “Third quarter parts sales and profits
benefited from a stronger economy, increased vehicle utilization
and the growth of our e-commerce platform.”
Kenworth, Peterbilt and DAF Announce Electric Vehicle
Production Availability
Kenworth K270E and T680E, Peterbilt models 579EV, 220EV and
520EV, and DAF CF Electric zero emissions trucks are now available
for customers to order, and will be produced next year. “PACCAR is
an innovation leader in zero emissions battery electric and
hydrogen fuel cell trucks,” said Kyle Quinn, PACCAR chief
technology officer.
In addition, PACCAR is providing charging infrastructure
solutions for customers who purchase battery electric Kenworth and
Peterbilt trucks in the United States and Canada. Kenworth and
Peterbilt customers and dealers are able to order electric chargers
from PACCAR Parts. PACCAR Financial offers flexible financing
options and PacLease bundles the cost of charging systems with full
service lease offerings.
Financial Services Companies Achieve Good Results
PACCAR Financial Services (PFS) offers competitive retail
financing to Peterbilt, Kenworth and DAF dealers and customers. PFS
has a portfolio of 203,000 trucks and trailers, with total assets
of $15.3 billion. PacLease, a major full-service truck leasing
company in North America and Europe, with a fleet of 38,600
vehicles, is included in this segment.
PFS achieved good profits during the third quarter and first
nine months of 2020. PFS earned $55.5 million in the third quarter
this year compared to $66.5 million earned in the same period last
year. Third quarter 2020 revenues were $397.6 million compared to
$362.8 million in the same quarter of 2019. For the nine-month
period, PFS pre-tax income was $159.3 million in 2020 compared to
$230.8 million last year. Nine-month revenues were $1.14 billion in
2020 compared with $1.07 billion for the same period a year ago.
“PFS’ portfolio performed very well during the third quarter of
2020,” said Todd Hubbard, PACCAR vice president. “Loan and lease
origination activity was strong in the third quarter. PFS sold a
record number of used trucks and vehicle resale values were steady
in the third quarter.” PACCAR Financial continues to invest in
worldwide used truck 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 Lyon, France, Denton,
Texas, and Prague, Czech Republic, and plans to open a used truck
facility in Madrid, Spain next year. Kenworth and Peterbilt truck
resale values command a 10-15% premium over competitors’
trucks.
“PFS provides leading-edge technology solutions, excellent
customer service and dedicated support to the transportation
industry. Kenworth, Peterbilt and DAF dealers and customers
appreciate the ease of doing business with PFS,” said Craig
Gryniewicz, PACCAR Financial Corp. president. PACCAR’s strong
balance sheet, complemented by its A+/A1 credit ratings, enables
PFS to have excellent access to the commercial paper and
medium-term note markets. PFS profitably supports the sale of
PACCAR trucks in 26 countries on four continents.
Capital Investment and Research and Development
PACCAR’s excellent long-term profits, strong balance sheet and
intense focus on quality have enabled the company to invest $7.2
billion in new and expanded facilities, innovative products and new
technologies during the past decade. Capital investments are
estimated to be $570-$600 million and research and development
expenses are expected to be $270-$280 million in 2020. PACCAR
estimates that it will invest $575-$625 million in capital projects
and $330-$360 million in research and development expenses next
year.
“PACCAR is 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,” said
Harrie Schippers, PACCAR president and chief financial officer.
PACCAR Earns Diversity Award
PACCAR Inc, Kenworth, Peterbilt, PACCAR Parts and Dynacraft were
each honored by the Women in Trucking Association (WIT) as a 2020
“Top Company for Women to Work for in Transportation.” The
recognition was for fostering gender diversity, flexible hours,
competitive compensation and benefits, training, professional
development and career advancement opportunities. WIT is a
nonprofit organization that encourages the employment and promotes
the accomplishments of women in the trucking industry. “PACCAR is
committed to hiring and promoting the most talented people in the
world and we know that the best people represent the diversity
present in the global community,” said Preston Feight, chief
executive officer.
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 third quarter earnings on October 20, 2020, at 9:00 a.m.
Pacific time. Interested parties may listen to the call by
selecting “Q3 Earnings Webcast” at PACCAR’s homepage. The Webcast
will be available on a recorded basis through October 27, 2020.
PACCAR shares are listed on the 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 Nine Months Ended September 30
September 30
2020
2019
2020
2019
Truck, Parts and Other:
Net sales and revenues
$
4,538.4
$
6,004.2
$
12,018.3
$
18,408.8
Cost of sales and revenues
3,958.3
5,106.8
10,589.4
15,665.6
Research and development
64.7
82.2
202.2
243.0
Selling, general and administrative
100.4
136.8
325.7
413.5
Interest and other (income), net
(13.0
)
(11.6
)
(45.6
)
(31.7
)
Truck, Parts and Other Income BeforeIncome Taxes
428.0
690.0
946.6
2,118.4
Financial Services:
Revenues
397.6
362.8
1,141.6
1,073.7
Interest and other
307.7
254.9
864.5
729.3
Selling, general and administrative
31.3
35.8
90.2
101.8
Provision for losses on receivables
3.1
5.6
27.6
11.8
Financial Services Income Before Income Taxes
55.5
66.5
159.3
230.8
Investment income
6.4
21.1
30.2
62.2
Total Income Before Income Taxes
489.9
777.6
1,136.1
2,411.4
Income taxes
104.4
169.7
243.5
554.8
Net Income
$
385.5
$
607.9
$
892.6
$
1,856.6
Net Income Per Share:
Basic
$
1.11
$
1.75
$
2.57
$
5.35
Diluted
$
1.11
$
1.75
$
2.57
$
5.34
Weighted Average Shares
Outstanding: Basic
346.8
346.6
346.7
346.9
Diluted
347.6
347.2
347.3
347.6
Dividends declared per share
$
.32
$
.32
$
.96
$
.96
PACCAR Inc CONDENSED BALANCE SHEETS (in
millions)
September 30 December 31
2020
2019
ASSETS Truck, Parts and Other: Cash and marketable
debt securities
$
4,413.2
$
5,169.4
Trade and other receivables, net
1,364.7
1,306.1
Inventories, net
1,124.5
1,153.2
Property, plant and equipment, net
3,137.8
2,883.8
Equipment on operating leases and other, net
1,916.0
1,777.2
Financial Services Assets
15,277.5
16,071.4
$
27,233.7
$
28,361.1
LIABILITIES AND STOCKHOLDERS' EQUITY Truck, Parts
and Other: Accounts payable, deferred revenues and other
$
5,271.3
$
6,013.1
Financial Services Liabilities
11,778.0
12,641.9
STOCKHOLDERS' EQUITY
10,184.4
9,706.1
$
27,233.7
$
28,361.1
Common Shares Outstanding
346.3
346.3
PACCAR Inc CONDENSED CASH FLOW STATEMENTS (in
millions) Nine Months Ended September 30
2020
2019
OPERATING ACTIVITIES: Net income
$
892.6
$
1,856.6
Depreciation and amortization: Property, plant and equipment
186.0
243.1
Equipment on operating leases and other
593.5
549.3
Net change in trade receivables, inventory and payables
87.7
(170.3
)
Net decrease (increase) in wholesale receivables on new trucks
785.7
(472.8
)
All other operating activities, net
(353.0
)
(89.3
)
Net Cash Provided by Operating Activities
2,192.5
1,916.6
INVESTING ACTIVITIES: Payments for property, plant
and equipment
(426.2
)
(387.2
)
Acquisitions of equipment for operating leases
(706.7
)
(1,038.4
)
Net increase in financial services receivables
(312.5
)
(519.0
)
Net increase in marketable debt securities
(25.5
)
(90.6
)
Proceeds from asset disposals and other
436.6
478.7
Net Cash Used in Investing Activities
(1,034.3
)
(1,556.5
)
FINANCING ACTIVITIES: Payments of cash dividends
(1,128.9
)
(1,027.8
)
Purchases of treasury stock
(41.6
)
(110.2
)
Proceeds from stock compensation transactions
41.3
33.8
Net (decrease) increase in debt and other
(858.8
)
1,015.5
Net Cash Used in Financing Activities
(1,988.0
)
(88.7
)
Effect of exchange rate changes on cash
(1.0
)
(37.8
)
Net (Decrease) Increase in Cash and Cash Equivalents
(830.8
)
233.6
Cash and cash equivalents at beginning of period
4,175.1
3,435.9
Cash and cash equivalents at end of period
$
3,344.3
$
3,669.5
PACCAR Inc SEGMENT AND OTHER
INFORMATION (in millions)
Three Months Ended
Nine Months Ended September 30
September 30
2020
2019
2020
2019
Sales and Revenues:
Truck
$
3,504.0
$
4,977.4
$
9,120.0
$
15,296.6
Parts
1,016.2
1,000.9
2,838.5
3,031.0
Financial Services
397.6
362.8
1,141.6
1,073.7
Other
18.2
25.9
59.8
81.2
$
4,936.0
$
6,367.0
$
13,159.9
$
19,482.5
Pretax
Profit: Truck
$
210.1
$
481.5
$
347.0
$
1,509.2
Parts
210.2
207.4
576.8
625.6
Financial Services
55.5
66.5
159.3
230.8
Investment Income and Other
14.1
22.2
53.0
45.8
$
489.9
$
777.6
$
1,136.1
$
2,411.4
GEOGRAPHIC REVENUE (in millions)
Three Months Ended
Nine Months Ended September 30
September 30
2020
2019
2020
2019
United States and Canada
$
3,162.0
$
4,405.9
$
8,338.0
$
12,819.0
Europe
1,143.7
1,305.2
3,261.7
4,550.5
Other
630.3
655.9
1,560.2
2,113.0
$
4,936.0
$
6,367.0
$
13,159.9
$
19,482.5
NEW
TRUCK DELIVERIES
Three Months Ended Nine Months
Ended September 30 September 30
2020
2019
2020
2019
United States and Canada
20,700
31,700
52,200
90,600
Europe
10,500
12,700
28,500
45,300
Other
4,800
4,900
11,800
17,200
36,000
49,300
92,500
153,100
View source
version on businesswire.com: https://www.businesswire.com/news/home/20201020005319/en/
Ken Hastings (425) 468-7530 ken.hastings@paccar.com
PACCAR (NASDAQ:PCAR)
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