PACCAR Reports Record Earnings
27 April 1999
PACCAR Reports Record Earnings
BELLEVUE, Wash.--April 27, 1999--Strong truck demand and improved margins, particularly in the U.S., contributed to record first quarter earnings at PACCAR Inc, according to Mark C. Pigott, chairman and chief executive officer.First quarter 1999 sales increased to $2.1 billion, 18 percent higher than the $1.8 billion recorded a year ago. Net income of $119.5 million ($1.52 per share diluted) climbed 19 percent compared to the $100.4 million ($1.28 per share diluted) earned in the first quarter of 1998.
"The truck market in the U.S. continues to be strong with industry backlogs at approximately 12 months. There has been some softening in the truck market in Europe, although it is still expected to be a good year," said Pigott.
"PACCAR is well-positioned to take advantage of these robust truck markets due to investments made during the past five years in the development of new products, expanded and upgraded factories, stronger dealer networks, and financial services programs," Pigott noted.
"More recently, PACCAR has expanded its product line and gained additional capacity for future growth in Europe with the Leyland Truck acquisition, and after-market support has been strengthened with the addition of our 12th parts distribution center in San Luis Potosi, Mexico.
"PACCAR is in the process of increasing truck build rates at selected factories and the new production factory at Ste. Therese, Canada, is nearing completion," he added. "As consolidation within the industry continues, PACCAR's strong balance sheet and excellent financial returns enable us to make the necessary strategic investments to remain a solid growth company into the future," Pigott said.
As an example of PACCAR's investment in product development, Pigott pointed to the company's new Peterbilt Model 387, which was introduced during the quarter. The premium on-highway aerodynamic conventional truck was designed to provide a product that sets industry standards for reliability, serviceability and low operating costs.
"The Model 387 has strong appeal for what has become the trucking industry's most important resource -- the driver. In terms of safety, comfort and economy, this truck is outstanding, and its exciting aerodynamic styling retains key features that customers confirm are distinctively Peterbilt," said Pigott. "This truck is a wonderful combination of form and function."
Pretax income for PACCAR's financial services segment increased compared to the first three months of 1998 due to continued growth in the loan and lease portfolios.
In other product areas, winch sales and profits were comparable to the first quarter of 1998. Auto parts profits decreased due to expenses related to new store openings.
PACCAR, a $7.6 billion company, is a leader in the design, development and manufacture of high quality light-, medium- and heavy-duty trucks under the Kenworth, Peterbilt, DAF and Foden nameplates. It also provides financial services and distributes truck parts related to its principal business. In addition, the Bellevue, Washington-based company manufactures industrial winches and sells general automotive parts and accessories through its retail outlets.
PACCAR shares are traded on the NASDAQ Exchange, symbol PCAR, and its homepage can be found at www.paccar.com.
PACCAR Inc.
SUMMARY INCOME STATEMENTS
(in millions of dollars (a))
Three Months Ended
March 31
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1999 1998
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Truck and Other Net Sales $2,068.6 $1,752.3
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Financial Services Revenues $ 84.5 $ 73.1
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Income Before Taxes:
Truck and Other $ 160.6 $ 128.5
Financial Services 18.3 17.0
Investment Income 8.3 6.8
Other, net .2 4.8
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Total Income Before Income Taxes 187.4 157.1
Income Taxes 67.9 56.7
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Net Income $ 119.5 $ 100.4
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Net Income Per Share:
Basic $ 1.53 $ 1.29
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Diluted $ 1.52 $ 1.28
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(a) Except per share amounts