) posted a 20.9% fall in profits to 72 cents per share in the
fourth quarter of 2012 from 91 cents in the same quarter of prior
year. Nevertheless, EPS was higher than the Zacks Consensus
Estimate of 68 cents. Net income dipped 22.6% to $253.5 million
from $327.7 million in the fourth quarter of 2011.
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The decline in profits was attributable to a 17.7% fall in
consolidated revenues to $3.99 billion due to lower revenues
generated from the company's Truck, Parts and Other segment,
partially offset by higher Financial Services revenues. However,
total revenues exceeded the Zacks Consensus Estimate of $3.66
PACCAR performed well in full year 2012. The company's EPS
improved 9% to $3.12 from $2.86 in 2011. It outdid the Zacks
Consensus Estimate of $3.09.
The company also generated the highest revenues of $17.05 billion
in its history, which surpassed the Zacks Consensus Estimate of
$15.96 billion. Thanks to the company's superior products and
services, geographic diversification, impressive aftermarket
parts business and commendable performance of Financial Services.
Revenues in the Truck and Other segment dipped 19.4% to $3.70
billion during the quarter but rose 4.1% to $15.95 billion in the
year. The company's DAF nameplate trucks achieved a record market
share of 16.0% in the above 16-tonne market, the highest in its
84-year history. Pre-tax income ebbed 31.5% to $271.3 million in
the quarter but inched up 4.5% to $1.29 billion in the year.
Industry sales in the above 16-tonnes in Western and Central
Europe were 222,000 units in 2012. The company expects industry
sales in the same market between 210,000 units and 250,000 units
during 2013 as customers are expected to purchase Euro 5 vehicles
ahead of the introduction of the Euro 6 emission requirement in
Meanwhile, PACCAR achieved a record Class 8 retail market share
of 28.9% in the U.S. and Canada as customers benefited from low
operating costs of Kenworth and Peterbilt vehicles. Class 8
industry retail sales in the U.S. and Canada improved 14.2% to
225,000 units in 2012 from 197,000 in 2011. The company expects
industry retail sales between 210,000 vehicles and 240,000
vehicles in 2013, driven by ongoing replacement of the aging
truck population and overall economic growth.
Revenues in the Financial Services segment (comprises portfolio
of 154,000 trucks and trailers, with total assets of $10.80
billion) increased 11.9% to $297.8 million while pretax income
rose 16.8% to $78.7 million in the fourth quarter of 2012. For
the full year, Financial Services revenues increased 6.8% to
$1.10 billion while pretax income rose 30.2% to $307.8 million.
The company's believes investors have strong demand for PACCAR's
During the year under study, PACCAR repurchased 4.19 million
shares for $162.1 million. Under the current Board-approved
authorization of $300 million of stock repurchases, the company
has repurchased 4.99 million shares for $192.0 million.
PACCAR announced cash dividends of $1.58 per share to its
shareholders for 2012, including a fourth quarter special
dividend of 80 cents per share. Total dividend declared during
the year increased 22% from 2011.
PACCAR's cash and marketable debt securities amounted to $2.40
billion as of December 31, 2012, down from $2.90 billion as of
December 31, 2011. Long-term debt remained unchanged at $150
million as of December 31, 2012 compared with the year-ago level.
Cash from operations decreased to $1.52 billion in 2011 from
$1.59 billion in 2011. Capital expenditures of $511.0 million and
research and development expenses of $279.3 million were made in
global expansion strategies during the year.
The company expects capital additions of $400-$500 million and
research and development expenses of $225-$275 million in 2013 as
Kenworth, Peterbilt and DAF design new products and services.
PACCAR, a Zacks Rank #4 (Sell), is the third largest manufacturer
of heavy-duty trucks (with a capacity of more than 15 metric
tons) in the world after
), and has substantial manufacturing exposure to light/medium
trucks (with a capacity of 6-15 metric tons). The company also
provides customer support for its products with the supply of
aftermarket parts, finance and leasing services.
) with Zacks Rank #2 (Buy) is performing well in the industry
where PACCAR operates.