Paccar Inc., parent of Kenworth and Peterbilt, reported first quarter 2001 net income of $44.3 million on sales of $1.5 billion.
For the same period a year ago the company posted net income of $154.9 million on sales of $2.3 billion.
"The financial results reflect a recessionary truck market in North America comparable to 1990/91," said Mark Pigott, chairman and CEO. "The industry is being severely impacted by high levels of new and used truck inventory, lower freight tonnage and high fuel and insurance costs." Pigott noted that Paccar’s U.S. and Canadian Class 8 production in the first quarter was 20% below first quarter 2000.
In Europe, where Paccar manufactures DAF and Foden trucks, the market is impacted by the slowing global economy. Truck production this year is expected to be at least 10% lower than 2000.
Paccar’s Financial Services had first quarter revenues of $120.4 million, up 11% from a year ago. Pretax income was $11.7 million, down 30% from last year.
The financial division’s conservative approach "enabled the company to maintain reasonable results in the turbulent market," said Vice Chairman Michael Tembreull. "The combination of increased vehicle repossessions and lower used truck prices did result in higher credit losses."
Tembruell also noted that Paccar Financial Europe is scheduled to open this summer and will offer a range of financial services to Western European truck operators.