DDC posted second quarter 2000 net income of $9.7 million on revenues of $538 million, down from $12.8 million on revenues of $585 million second quarter 1999. Revenues for the first six months of 2000 were $1.07 billion versus $1.18 billion a year ago. Net income for the period was $19.8 million versus $25.3 million the first half of 1999.
President and CEO Charles McClure said their current forecast indicates a reduction of 25% to 30% in North American heavy duty truck production this year, down from record 1999 levels. DDC’s second quarter on-highway engine revenues were $328 million versus $380 million last year, due mainly to a 17.5% reduction in Series 60 engine shipments for on-highway truck applications. The company said it expects unit shipments for the rest of the year to be significantly lower than the comparable period in 1999 as truck makers reduce production to coincide with lower demand.
Off-road revenues were up 7%, to $170 million despite a 26% decline in shipments of two-cycle engines in association with the Power Evolution program, DDC said. Shipments of its four cycle products increased in the quarter and light duty industrial engine shipments continued to show strong growth.
Revenues from the automotive sector were $45 million, about even with second quarter 1999. The company said it will transition production to its new 2.5 liter 16 valve common rail engine for certain vehicle applications starting fourth quarter 2000.
Revenues from parts and remanufactured products were $110 million compared to $112 million in second quarter 1999. The company said sales of remanufactured products has continued to show improvement while service parts revenues were affected by the timing of certain promotion programs.
DaimlerChrysler, which currently owns 21.3% of DDC, recently announced an agreement to acquire the rest of the company through a tender offer at $23 per common share or about $423 million. Penske Corp., which owns 48.6% of the outstanding common shares, has committed to tender its shares to DaimlerChrysler.