PACCAR Reports Y/Y Dip in Q4 Revenues Despite Increase for PACCAR Financial Services
JAN 27, 2021 - 7:17 am
PACCAR reported quarterly revenues of $5.57 billion in Q4/20 compared with $6.12 billion reported in the same period in 2019. The company earned $405.8 million in Q4/20 compared with earnings of $531.3 million in Q4/19. PACCAR achieved revenues of $18.73 billion in 2020 compared with revenues of $25.6 billion in 2019. The company earned $1.3 billion in 2020 compared with $2.39 billion earned in 2019.
“PACCAR (Nasdaq: PCAR) reported good annual revenues and profits in 2020,” Preston Feight, CEO of PACCAR, said. “PACCAR’s results reflect the company’s premium-quality products and services, excellent operational efficiency and strong aftermarket parts sales. I am very proud of our employees, who have delivered outstanding products and transportation solutions to our customers while demonstrating the highest commitment to health and safety at all PACCAR facilities.
“PACCAR is investing in new technologies that will deliver enhanced operational efficiency and environmental benefits to our customers. PACCAR made progress on several important technology and innovation initiatives in 2020, including a strategic partnership to develop autonomous trucks, the launch of electric truck production, and enhancing connected services for Kenworth, Peterbilt and DAF trucks.”
Business Highlights – 2020
PACCAR earned its 82nd consecutive year of net income.
PACCAR delivered 133,300 vehicles worldwide.
Kenworth and Peterbilt increased U.S. and Canada Class 8 retail sales market share to 30.1%.
Kenworth and Peterbilt increased U.S. and Canada medium duty retail sales market share to a company record 22.6%.
DAF increased Europe above 16-tonne registrations market share to 16.3%.
DAF Brasil achieved a company record for above 16-tonne retail sales market share of 5.7%.
Financial Highlights – Q4/20
Consolidated net sales and revenues of $5.57 billion
Net income of $405.8 million
Company record quarterly PACCAR Parts revenue of $1.07 billion
Company record quarterly PACCAR Parts pretax income of $222.5 million
PACCAR Financial Services pretax income of $63.8 million
Investment of $202.4 million in capital projects and research and development
Financial Highlights – Full Year 2020
Consolidated revenues of $18.73 billion
Net income of $1.3 billion
PACCAR Parts revenue of $3.91 billion
PACCAR Parts pretax income of $799.3 million
PACCAR Financial Services assets of $15.8 billion
PACCAR Financial Services new business volume of $5.02 billion
PACCAR Financial Services pretax income of $223.1 million
Cash provided by operations of $2.99 billion
Dividends declared of $687.1 million
Medium-term note issuances of $1.99 billion
Investment of $843.4 million in capital projects and research and development
Company record year-end stockholders’ equity of $10.42 billion.
Global Truck Markets
“A strong rebound in manufacturing, housing starts, automotive production and consumer spending in the second half of 2020 resulted in good freight tonnage and robust demand for Kenworth and Peterbilt trucks. Class 8 truck industry retail sales in the U.S. and Canada were 216,500 units in 2020. Kenworth and Peterbilt achieved market share of 30.1%,” Darrin Siver, senior vice president at PACCAR, said. “PACCAR has increased its estimate of 2021 U.S. and Canada Class 8 truck industry retail sales to a range of 250,000-280,000 trucks.”
According to PACCAR, European above 16-tonne truck industry registrations were 230,500 trucks in 2020. PACCAR estimated that European truck industry registrations in the above 16-tonne market in 2021 will be in the range of 250,000 to 280,000 trucks.
“European truck demand improved in the second half of the year along with the European economies,” Harry Wolters, president of DAF, said. “DAF achieved excellent above 16-tonne market share of 16.3% in 2020. DAF trucks deliver premium quality, exceptional fuel efficiency and superior driver comfort for its customers.”
The South American above 16-tonne truck market was 93,000 vehicles in 2020 and is projected to be in a range of 100,000 to 110,000 trucks in 2021, according to PACCAR. DAF Brasil achieved a company record of 5.7% market share in the Brazil above 16-tonne market in 2020.
“DAF Brasil’s record market share reflects increased customer demand for the industry-leading DAF XF trucks introduced this year,” Mike Kuester, assistant vice president of South America for PACCAR, said.
PACCAR Financial Services Results
PACCAR Financial Services (PFS) has a portfolio of 203,000 trucks and trailers, with total assets of $15.8 billion. PacLease, a truck leasing company in North America and Europe with a fleet of more than 38,000 vehicles, is included in this segment. PFS achieved Q4/20 pretax income of $63.8 million compared with $68.1 million in Q4/19. Q4/20 revenues were $432.6 million compared with $406.3 million in the same quarter of 2019. PFS earned $223.1 million of pretax profit in 2020 compared with the $298.9 million earned in 2019. PFS revenues were $1.57 billion in 2020 compared with $1.48 billion achieved in 2019.
“PFS’ portfolio performed very well during the fourth quarter of 2020, with strong loan and lease origination activity,” Todd Hubbard, vice president at PACCAR, said. “PFS’ profitability during the quarter benefited from increased used truck demand.”
PFS recently opened used truck centers in Lyon, France: Denton, TX; and Prague, Czech Republic, and plans to open a used truck facility in Madrid, Spain, in 2021. Kenworth and Peterbilt truck resale values command a 10% to 15% premium over competitors’ trucks, according to PACCAR.
“PACCAR’s strong balance sheet, complemented by its A+/A1 credit ratings, enables PFS to offer competitive retail financing to Kenworth, Peterbilt and DAF dealers and customers in 26 countries on four continents,” Craig Gryniewicz, president of PACCAR Financial, said. “PACCAR Financial Services has excellent access to the debt markets, issuing $1.99 billion in three-, four- and five-year term notes during 2020.”
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