Paccar Celebrates 71 Years of Profitability Amid '09 Results

Paccar announced it has reached its 71st consecutive year of net profit, with improved fourth quarter revenue and income from the third quarter.

Net income for the fourth quarter was $46.1 million, compared to earnings of $13 million in the third quarter, and $113.1 million in the fourth quarter of 2008.

Consolidated sales and revenue was $2.24 billion for the three-month period, down from about $2.9 billion in the year-ago quarter. The company's aftermarket parts segment saw revenues of $497.6 million.

For the full year 2009, the company's net income was $111.9 million, compared to about $1 billion for 2008. Net sales and financial service revenues for the full year were $8.09 billion versus $14.97 billion in 2008.

"Many of the world's economies are still in the middle of a challenging recession," said Mark Pigott, chairman and CEO of Paccar. "Consumers are increasing their savings and reducing spending, which is healthy for economies in the long run; however, it has resulted in less freight year-on-year and lower demand for commercial vehicles. Paccar is one of the few companies in the sector to deliver net income every year in the last decade. This outstanding performance has benefited our shareholders with a 19.1 percent annual return for the decade compared to the S&P annual return of negative 1.0 percent."

In 2009, Paccar delivered 61,000 vehicles worldwide through its Kenworth, Peterbilt and DAF nameplates. Paccar grew its Kenworth and Peterbilt dealer network to a record 551 locations.

The company's Kenworth and Peterbilt trucks had a combined 25.1 percent retail share of the U.S. and Canadian Class 8 market and 15.3 percent retail share of the Class 6-7 market in 2009.

"The fourth quarter 2009 industry truck sales benefited from a modest pre-buy due to the transition to 2010 engines," said Dan Sobic, executive vice president of Paccar. "Industry truck retail sales in 2010 are expected to improve slightly due to the aging of the fleet and some general economic growth. The U.S. and Canadian Class 8 retail sales in 2010 are projected to be in the range of 110,000-140,000 units."

The company plans to increase capital investments in 2010, with targets for capital expenditures of $175-$200 million and research and development expenses of $225-$250 million for new products and enhancing operating efficiency.

Other 2009 achievements include construction of Paccar's new engine production facility in Columbus, Miss. Paccar engines will be available in Peterbilt and Kenworth trucks in the summer of 2010. In addition, Paccar launched Technology Centers at all of its Kenworth, Peterbilt and DAF manufacturing facilities. Kenworth added two new models, while Peterbilt introduced two new fuel efficient medium-duty models in 2009.