Chairman and CEO Mark Pigott called the achievement “remarkable” considering the highly cyclical truck market.
Nevertheless, last year's profits were slimmer. Consolidated net sales and financial services revenues for 2001 were $6.1 billion, a 23 percent decrease from $7.9 billion in 2000. Net income was $173.6 million, compared to $441.8 million the previous year. Fourth quarter net income was $50.4 million, compared to $62.7 million in fourth quarter 2000.
Return on beginning shareholder equity (ROE) was 7.7 percent in 2001 compared to 20.9 percent earned in 2000. The company's 2001 after-tax return on sales (ROS) was 3.1 percent versus 5.9 percent a year earlier.
"Although the North American transportation industry has benefited recently from lower interest rates and fuel prices, these factors were more than offset by lower freight tonnage, higher insurance costs and declining used truck values. The result was a 13 percent reduction in North American Class 8 heavy-duty truck orders last year," said David Hovind, president. "It is anticipated that industry Class 8 orders this year will be comparable to 2001."
Hovind said the European truck market was good in 2001, compared to 2000, and Paccar’s DAF subsidiary increased its market share. However, a 20-25% drop in European truck demand is expected this year.
Paccar's Financial Services, including Paccar Leasing, represents a portfolio of over 100,000 trucks and trailers with total assets of over $4.7 billion. Fourth quarter revenues of $110 million were 13 percent lower than the same quarter in 2000, while pretax income declined by 60 percent to $7 million due to higher credit losses in the U.S. truck market.
For the year, revenues decreased 4 percent to $459 million and pretax income was 54 percent lower at $35 million compared to $76.4 million last year.
In North America, credit losses continued as a result of the record number of fleet bankruptcies and truck repossessions. Nevertheless, Paccar Leasing achieved its eighth consecutive year of record profits.