"Paccar's excellent balance sheet and operating cash flow of $1.55 billion in 2010 have enabled increased capital investments, enhancing manufacturing efficiency as well as development of innovative new products, such as the Paccar 12.9L MX diesel engine," said Ron Armstrong, Paccar president. The Paccar MX engine is being installed in approximately 25 percent of Kenworth and Peterbilt vehicles in the U.S. and Canada.
"Global truck markets are expected to improve in 2011, although the negative impact resulting from recent commodity price increases and the cost of installing engine emission equipment will moderate Paccar's operating margins," noted Mark Pigott, chairman and chief executive officer. "Paccar will also incur increased expenses due to global business initiatives and the development of new models to enhance its product ranges."
Paccar earned $169.8 million ($.46 per diluted share) for the fourth quarter 2010 compared to $46.1 million ($.13 per diluted share) in the fourth quarter 2009. Fourth quarter net sales and financial service revenues were $3.06 billion compared to $2.24 billion reported for the comparable period in 2009.
Net sales and financial service revenues for the full year 2010 were $10.29 billion versus $8.09 billion in 2009. Paccar reported net income in 2010 of $457.6 million ($1.25 per diluted share) compared to $111.9 million ($.31 per diluted share) in 2009.
Net income for the fourth quarter and full year 2010 benefited from a gain on the sale of the company's Nashville plant of $5.1 million ($3.2 million net of tax) and the favorable effect of recent U.S. tax law changes of $5 million.
Cash dividends of $.69 per share, including a fourth quarter special dividend of $.30 per share, were paid during 2010. Total dividends declared in 2010 increased by 28 percent compared to 2009. Paccar has paid a dividend every year since 1941.
Paccar delivered 78,800 vehicles worldwide and introduced five new truck models, including the Kenworth T700 and Peterbilt Model 587. The Peterbilt Model 384 earned the Heavy-Duty Commercial Truck of the Year award. Kenworth Trucks ranked highest in the J.D. Power Medium-Duty Dealer Service Customer Satisfaction Study. The DAF CF85 earned the U.K.'s Motor Transport award for "Fleet Truck of the Year" for an unprecedented third consecutive year and the 10th time in the last 17 years. The DAF LF was awarded the "Best 7.5 Tonne Imported Truck" in Germany. Leyland Trucks was honored as the Overall Winner in the annual Manufacturing Excellence Awards.
Production of the Paccar MX engine for Kenworth and Peterbilt vehicles commenced at the Columbus, Mississippi factory with 10,000 orders already received.
"Industry sales above 15-tonnes in Western and Central Europe were 183,000 units in 2010, a 9 percent increase compared to 2009," said Harrie Schippers, DAF president. "In 2010, DAF achieved a market share of 15.2 percent in the above 15-tonne market, the highest share in its 82-year history. DAF is the market share leader in the United Kingdom, Netherlands, and Belgium. DAF is also the market share leader in the Central European above 15-tonne market, which was over 20,000 vehicles in 2010. These achievements reflect DAF's steady progress towards its medium term goal of 20 percent market share. It is estimated that industry sales in the above 15-tonne truck market in Europe in 2011 will be in a range of 220,000-240,000 units," said Schippers.
In North America, "Class 8 industry retail sales in the U.S. and Canada were 126,000 in 2010 compared to 108,000 in 2009, reflecting the slowly improving economy, which has been negatively impacted by high unemployment and low housing starts," said Dan Sobic, Paccar executive vice president. "Our customers' profitability is benefiting from continued increases in freight rates and volumes. Industry retail sales in 2011 are expected to increase to a range of 180,000-200,000 vehicles, reflecting a continued economic recovery and the need to replace an aging truck population. This projected sales level is still below normal replacement demand of approximately 225,000 units," added Sobic.
Paccar's aftermarket parts sales continue to increase in all of its markets. Improving truck utilization and an aging North American truck fleet are generating higher levels of parts and service business.
"Paccar's aftermarket parts sales in North America and Australia achieved record revenue in 2010," said Darrin Siver, Paccar Parts general manager. A new distribution center was opened in Santiago, Chile in December to support Kenworth and DAF customers in South America.