Paccar earned $39.4 million for the third quarter of 2001, compared with $93.1 million for the same period a year ago.
Third quarter net sales and financial services revenues were $1.5 billion, compared to $1.8 billion reported for the comparable period in 2000.
Net sales and financial services revenues for the first nine months of 2001 were $4.6 billion. For the first nine months of 2001, Paccar reported net income of $123.2 million compared to $379.1 million in 2000.
"The truck market in North America remains challenging due to economic turbulence. Paccar is pleased that its Kenworth, Peterbilt, DAF and Foden trucks are enhancing their global quality-leadership position," said Mark Pigott, chairman and CEO. "Paccar’s remarkable financial performance of profitability for over 60 consecutive years reflects its premium products and balanced business approach throughout industry cycles. Some competitor truck OEMs are in a difficult situation today due to their vehicles' deteriorating values and weak dealer organizations, which has resulted in significant financial losses.
"Paccar’s financial results this year reflect the lower, recessionary demand for heavy-duty trucks in North America," he added. "Industry Class 8 retail unit sales for the first nine months of 2001 were 37% lower than last year, and a recovery is not expected in the near-term. The industry is still being impacted by lower freight tonnage, higher operating costs and a high level of used trucks."
Pigott noted that, in spite of marketplace conditions, the company made some modest increases in its truck production build rate for Kenworth and Peterbilt Class 8 trucks and continues to be one of the most profitable companies in the industry. “In addition, Paccar has aggressively reduced costs throughout the company," he said.
David Hovind, president, added, "The European truck market is having a good year. However, the slowing Eurozone economy has caused truck production in Europe to be 10-15% percent lower than last year's record level. In response to lower order levels, DAF reduced production 11% earlier this month."
Paccar’s Financial Services segment represents a portfolio of over 100,000 trucks and trailers with total assets of nearly $5 billion. Included in this segment is Paccar Leasing, one of the largest full-service truck leasing companies in North America, with over 14,000 vehicles.
Financial Services third quarter revenues of $112 million were 12% lower than the same quarter of 2000, while pretax income was $8.2 million compared to $20.4 for last year's third quarter. For the nine-month period, revenues were $349 million compared to $352 million for the same period a year ago. Pretax income for nine months was $28.0 million compared to $58.8 million in 2000.
"Paccar Financial's conservative approach to financing has enabled it to earn reasonable results in this difficult market," said Michael Tembreull, vice chairman. "Credit losses in the United States continue as a result of a record number of fleet bankruptcies and truck repossessions. Paccar Leasing is having another excellent year as more customers select leasing for their transportation solution. Paccar Financial Europe (PFE) was successfully launched in seven Western European countries. In addition, new information technology developments in financial services are enhancing the daily transactions between customers, dealers and all of Paccar’s finance companies."