Bellevue, Wash. — That economic slowdown everyone keeps predicting is coming? It sure hasn’t arrived yet at PACCAR Inc. The company, which includes the Kenworth and Peterbilt nameplates, announced Tuesday record revenues and net profits for the first quarter of 2019.
“I am very proud of our 28,000 employees who have delivered industry-leading products and services to our customers,” PACCAR CEO Ron Armstrong said in a released statement. “PACCAR delivered a record quarterly number of trucks, driven by Kenworth, Peterbilt and DAF’s (PACCAR’s European nameplate) strong market share and robust global truck demand. PACCAR Parts achieved record quarterly revenues and pretax profits.
Armstrong said much of PACCAR’s good fortune can be attributed to “continued economic and freight growth in North and South America and Europe.”
“We expect 2019 to be another excellent year for PACCAR,” Armstrong said. “Kenworth and Peterbilt’s 2019 build schedules are substantially full, DAF is increasing market share in the European market and the South American above 16-ton truck market is expected to increase approximately 25% in 2019 compared to last year.”
First quarter 2019 net sales and financial services revenues were a record $6.49 billion, 15% higher than the $5.65 billion earned in the first quarter of 2018. PACCAR achieved net income of $629.0 million in the first quarter of this year, another record and 23% higher than the $512.1 million earned in the same period last year.
“First quarter 2019 U.S. and Canada Class 8 truck industry retail sales increased 23% compared to the same period last year,” said Gary Moore, PACCAR executive vice president. At the same time, the company set a new high with 51,000 vehicle deliveries worldwide.
“The strong U.S. and Canada Class 8 truck market and backlog reflect the growing economy and record freight demand,” Moore said. “Class 8 truck industry retail sales for the U.S. and Canada are projected to be in a range of 295,000-315,000 vehicles in 2019.”
DAF’s European above-16-ton truck registrations increased 10% in the first quarter of 2019 compared to the same period last year. “DAF achieved a record 17.1% market share in the European above 16-ton segment in the first quarter this year,” said Harry Wolters, DAF president. “We estimate that European truck industry registrations in the above 16-ton market in 2019 will be in a range of 290,000-320,000 trucks.
In Brazil, the above 16-ton truck market is projected to rebound by approximately 30% to 65,000-75,000 vehicles in 2019, compared to 53,000 vehicles last year. “DAF Brazil is increasing its market share in a growing Brazilian truck market,” said Carlos Ayala, DAF Brazil president.
PACCAR Parts also had a record first quarter, with a pretax income of $207.6 million in the first quarter of 2019, which is 8% higher than the $191.8 million earned in the same period last year. PACCAR Parts achieved revenues of $1 billion in the first quarter of 2019, which is 7% higher than the $939.9 million reported in the same period last year.
“PACCAR Parts has achieved 8% average annual sales growth over the last 15 years,” said David Danforth, PACCAR vice president and PACCAR Parts general manager. “PACCAR Parts’ outstanding growth has been driven by investments in PDCs (parts distribution centers), increased dealer locations including TRP Stores, expanded PACCAR-branded and TRP product lines, industry-leading fleet services and e-commerce programs, and a growing number of PACCAR trucks and engines in operation.
PACCAR Parts is constructing a new 160,000 square-foot PDC in Ponta Grossa, Brazil, and begun construction of a 250,000 square-foot PDC in Las Vegas. Both are scheduled to open in 2020.
PACCAR’s excellent long-term profits, strong balance sheet, and consistent focus on quality, technology and productivity have enabled the company to invest $6.2 billion in new facilities, innovative products and new technologies during the past decade.
“In 2019, capital expenditures of $625-$675 million and research and development expenses of $320-$340 million are targeted for new truck models, integrated powertrains including electric, hybrid and hydrogen fuel cell, advanced driver assistance systems, truck connectivity, and enhanced manufacturing and parts distribution facilities,” noted George West, PACCAR vice president.
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