PACCAR’s reported net income was $545.3 million in Q3/18, 35% higher than the net income of $402.7 million earned in the same period last year. Third quarter net sales and financial services revenues were $5.76 billion, 14% higher than the $5.06 billion reported in the third quarter of 2017. Third quarter results benefited from one-time tax items, offset by lower truck margins due to the normal DAF factory summer shutdown and costs associated with supplier parts shortages in North America.
Net sales and financial services revenues for the first nine months of 2018 were $17.22 billion compared to $14.00 billion last year. PACCAR earned $1.62 billion for the first nine months of 2018. The company reported net income of $1.09 billion in the first nine months of last year.
“PACCAR reported excellent revenues and net income for the third quarter of 2018,” said Ron Armstrong, PACCAR CEO. “PACCAR’s third quarter results reflect strong global truck demand, record truck production, record market share in Europe, and excellent global aftermarket parts results. I am very proud of our 28,000 employees who have delivered industry-leading products and services to our customers.”
PACCAR Financial Services (PFS) achieved good profits during the third quarter and first nine months of 2018 due to excellent portfolio performance and higher used truck pricing. PFS earned $78.8 million in the third quarter this year compared to $70.6 million earned in the same period last year. Third quarter 2018 revenues were $339.9 million compared to $328.2 million in the same quarter of 2017. For the nine-month period, PFS pre-tax income was $218.7 million in 2018 compared to $189.8 million last year. Nine-month revenues were $1.01 billion in 2018 compared with $936.7 million for the same period a year ago.
“PFS’ portfolio performed well during the third quarter of 2018,” said Bob Bengston, PACCAR senior vice president. “Demand for used trucks has been buoyant this year due to strong U.S. economic and freight growth. Kenworth and Peterbilt used truck values increased more than 10% in the third quarter compared to the same period last year. Kenworth and Peterbilt truck resale values continue to command a 10-20% premium over competitors’ trucks.”
Armstrong added, “Customer demand for Kenworth, Peterbilt and DAF trucks is at record levels. Kenworth and Peterbilt have received more than double the number of U.S. and Canada Class 8 orders in the first nine months of this year, compared to the same period last year. PACCAR truck backlogs are very strong, with Kenworth and Peterbilt production scheduled well into next year.”
PACCAR repurchased 906,100 of its common shares for $59 million in the third quarter. Stock repurchases of $241.0 million remain under the current $300 million program authorized by the PACCAR Board of Directors.
Class 8 truck industry retail sales for the U.S. and Canada are expected to be in a range of 280,000-290,000 vehicles in 2018, 31% higher than in 2017. Class 8 truck industry retail sales in 2019 for the U.S. and Canada are estimated to be in a range of 280,000-310,000 vehicles, which would be one of the strongest markets in history.
“Customer demand for DAF XF and CF vehicles, ‘International Truck of the Year 2018,’ has propelled DAF’s year-to-date above 16-tonne market share to a record 16.6%, compared to 15.1% during the same period last year,” said Preston Feight, PACCAR executive vice president. “DAF is the market share leader in the above 16-tonne truck segment in the United Kingdom, Netherlands, Belgium, Poland, Hungary, and Czech Republic, and is the leading import brand in Germany.”
PACCAR is a global technology leader in the design, manufacture and customer support of high-quality light-, medium-, and heavy-duty trucks under the Kenworth, Peterbilt, and DAF nameplates.
PFS offers competitive retail financing to Peterbilt, Kenworth and DAF dealers and customers. It has a portfolio of 192,000 trucks and trailers, with total assets of $14.09 billion.
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