PACCAR earned the fourth-highest annual net income in its 103-year history in 2008 and delivered its 70th consecutive year of net profit.
“PACCAR’s excellent balance sheet and strong cash flow have enabled ongoing investments in capital projects such as diesel engines, new vehicles and factory productivity improvements,” said Mark C. Pigott, chairman and chief executive officer. “These projects will assist the company in achieving its long-term growth objectives. However, the severe recession is affecting our business in North America and Europe. Our fourth quarter 2008 financial results were negatively impacted by reduced gross margins, lower build rates and temporary plant shutdowns. These challenges are increasing in 2009. PACCAR is rigorously reducing operating expenses and capital expenditures to align the business with the slower markets.”
PACCAR earned the fourth-highest annual net income in its 103-year history in 2008 and delivered its 70th consecutive year of net profit.
“PACCAR’s excellent balance sheet and strong cash flow have enabled ongoing investments in capital projects such as diesel engines, new vehicles and factory productivity improvements,” said Mark C. Pigott, chairman and chief executive officer. “These projects will assist the company in achieving its long-term growth objectives. However, the severe recession is affecting our business in North America and Europe. Our fourth quarter 2008 financial results were negatively impacted by reduced gross margins, lower build rates and temporary plant shutdowns. These challenges are increasing in 2009. PACCAR is rigorously reducing operating expenses and capital expenditures to align the business with the slower markets.”
PACCAR net earnings were $113.1 million ($.31 per diluted share) for the fourth quarter of 2008 compared to the $261.1 million ($.71 per diluted share) earned in the fourth quarter of 2007. Fourth-quarter net sales and financial service revenues were $2.92 billion compared to $3.76 billion reported for the comparable period in 2007. During the quarter, the company generated $345.4 million in operating cash flow.
For the full-year 2008, consolidated net sales and financial service revenues were $14.97 billion versus $15.22 billion in 2007. Net income earned in 2008 of $1.02 billion ($2.78 per diluted share) was 17 percent lower than the $1.23 billion ($3.29 per diluted share) earned during 2007. Cash dividends of $.82 per share were declared during 2008, including a special dividend of $.10 per share. During the last decade, PACCAR’s regular dividends have had an annualized increase of 19.8 percent per year. In 2008, PACCAR distributed $859.7 million to shareholders in dividends and share repurchases.
“Class 8 industry retail sales in the U.S. and Canada were 153,000 in 2008 compared to 176,000 in 2007 and reflected the recessionary economy, particularly the slowdown in the housing and automotive sectors,” said Dan Sobic, PACCAR executive vice president. “Industry retail sales in 2009 are expected to be in the range of 130,000-170,000 vehicles, reflecting continued economic weakness. PACCAR’s 2008 retail share of the U.S. and Canadian Class 8 market was 26 percent. Our customers are benefiting from lower fuel prices and improved availability of drivers, even though freight tonnage is comparable to 2000 levels.”
Bill Jackson, Peterbilt general manager, commented, “There is some good news longer term about the industry. The average age of the North American industry fleet is the highest in the last 15 years. Truck retail sales are below the five-year average of 235,000 units because of the current recession. In a normal cycle, many truck operators would replace their vehicles in the next 12-24 months to maintain a competitive operating cost structure. The truck industry is generating good parts and service business due to the aging fleet and the industry is poised to rebound when the general economy improves.”
An important element of PACCAR’s strength is the robust profitability of its global dealer network, with over 1,900 locations. Kenworth, Peterbilt and DAF dealers invested over $250 million in 2008 as they added more than 100 new locations, installed inventory-management systems and enhanced their customer support programs.