PACCAR Revenues Jump 14% to Record $19.46MM in 2017
JAN 31, 2018 - 6:10 am
PACCAR reported record quarterly net sales and financial service revenues of $5.45 billion in Q4/17 compared to $4.07 billion for the same period in 2016. PACCAR earned $589.2 million ($1.67 per diluted share) for Q4/17, including $173.4 million of net tax benefits resulting from recent changes to U.S. tax law. The one-time net tax benefits include a reduction of net deferred tax liabilities of $304.0 million, partially offset by a tax on accumulated foreign earnings of $130.6 million.
Excluding the one-time tax benefits, PACCAR reported adjusted net income (non-GAAP) of $415.8 million ($1.18 per diluted share). The company earned $288.8 million ($.82 per diluted share) in the Q4/16.
PACCAR achieved record revenues of $19.46 billion in 2017, a 14% increase compared to revenues of $17.03 billion in 2016. PACCAR earned $1.68 billion ($4.75 per diluted share) in 2017, including the $173.4 million one-time tax benefit. Excluding the one-time tax benefit, PACCAR earned adjusted net income (non-GAAP)1 of $1.50 billion ($4.26 per diluted share). The company reported annual net income of $521.7 million ($1.48 per diluted share) in 2016, including an $833.0 million non-recurring charge for a European Commission (EC) settlement. Excluding the charge, PACCAR reported adjusted net income (non-GAAP)1 of $1.35 billion ($3.85 per diluted share) in 2016.
“PACCAR (Nasdaq: PCAR) reported excellent annual revenues and profitability in 2017. PACCAR achieved its 79th consecutive year of net income,” said Ron Armstrong, CEO of PACCAR. “PACCAR’s financial results reflect the company’s premium-quality products and services, record heavy-duty truck market share in the U.S. and Canada, record aftermarket parts results and a strong European truck market. I am very proud of our 25,000 employees who have delivered outstanding products and services to our customers.
“The enacted tax legislation will generate positive cash flow for PACCAR as well as benefit the transportation industry in the United States,” said Harrie Schippers, president and chief financial officer. “The revised corporate tax rate, comparable to other leading OECD countries’ tax rates, and accelerated machinery and equipment depreciation, will likely stimulate increased capital investment in the United States.” PACCAR estimates that its 2018 effective global tax rate will be 23% to 25%, compared to approximately 31% prior to the new tax law.
PACCAR delivered 158,900 vehicles worldwide, including a record 29,700 medium-duty trucks, while Kenworth and Peterbilt achieved record Class 8 retail market share of 30.7% in the U.S. and Canada. Overall Class 8 truck industry retail sales in the U.S. and Canada were 218,000 units in 2017, compared to 216,000 vehicles sold in 2016.
“Truck demand is increasing due to good economic growth, increased consumer spending, and strong commercial and residential construction, which has resulted in record freight tonnage and high fleet capacity utilization. U.S. and Canada Class 8 truck industry retail sales are expected to increase to a range of 235,000-265,000 trucks in 2018,” said Gary Moore, PACCAR executive vice president.
PACCAR Financial Services (PFS) has a portfolio of 188,000 trucks and trailers, with total assets of $13.20 billion. PacLease is included in this segment. PFS achieved Q4/17 pretax income of $72.5 million compared to $77.9 million earned in Q4/16. Q4/17 revenues were $332.2 million compared to $303.7 million in the same quarter of 2016. PFS earned $264.0 million of pretax profit in 2017 compared to $306.5 million in 2016, and revenues were $1.27 billion in 2017 compared to $1.19 billion in 2016.
“PFS’ excellent portfolio performance contributed to good results in 2017,” said Bob Bengston, PACCAR senior vice president. “Industry demand for used trucks in the U.S. is strong. Kenworth and Peterbilt truck resale values continue to command a 10-20% percent premium over competitors’ trucks.”
“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 24 countries on four continents,” said Todd Hubbard, PACCAR Financial president.
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