) posted second-quarter 2014 earnings of 90 cents per share,
marking an increase of 9.8% from 82 cents in the same quarter of
2013. Earnings surpassed the Zacks Consensus Estimate of 89
Net income surged 9.5% to $319.2 million from $291.6 million in
the year-ago quarter. The increase in earnings was attributable to
higher truck sales in the U.S. and Canada and better aftermarket
parts and financial services results globally.
Revenues in the quarter rose 6% to $4.57 billion, surpassing the
Zacks Consensus Estimate of $4.45 billion.
Paccar Inc - Earnings Surprise |
Revenues in the Truck, Parts and Other segment increased 6.4% to
$4.3 billion. Pre-tax income in the segment surged 11.8% to $383.8
million from $343.4 million a year ago.
Industry sales in the above 16-ton truck market in Europe are
expected to be in the range of 210,000-230,000 units in 2014, down
from 241,000 units in 2013. Meanwhile, the company expects Class 8
industry retail sales of 230,000-250,000 vehicles in the U.S. and
Canada in 2014, up from 212,000 in 2013 due to the ongoing
replacement of the aging truck population, economic growth and
higher fleet capacity. The company expects the demand for heavy
duty trucks in South America to range between 140,000-150,000 units
Revenues in the Financial Services segment (comprising a
portfolio of 161,000 trucks and trailers, with total assets of
$11.75 billion) increased 4.8% to $302.6 million while pre-tax
income rose 12.5% to $91.7 million in the second quarter of
PACCAR's cash and marketable debt securities amounted to $2.46
billion as of Jun 30, 2014, compared with $2.9 billion as of Dec
The company's cash from operations decreased to $840.8 million
in the first half of 2014 from $1.2 billion in the year-ago period.
The company recorded capital investments of $158 million and
research and development (R&D) expenses of $49.9 million in the
quarter. The company has targeted capital investments of $250-$300
million in 2014. It anticipates R&D expenses of $200-$225
million in 2014 for powertrain development and the enhancement of
operating efficiency of assembly facilities.
During the reported quarter, PACCAR raised its quarterly
dividend by 10% to 22 cents. In the last five years, the company's
regular quarterly dividend has increased more than 140%.
PACCAR currently carries a Zacks Rank #3 (Hold). Better-ranked
stocks in the same industry include Meritor, Inc. (
), Tower International, Inc. (
) and Visteon Corp. (
), all of which sport a Zacks Rank #1 (Strong Buy).
Want the latest recommendations from Zacks Investment Research?
Today, you can download 7 Best Stocks for the Next 30 Days.
Click to get this free report
PACCAR INC (PCAR): Free Stock Analysis Report
MERITOR INC (MTOR): Free Stock Analysis Report
VISTEON CORP (VC): Free Stock Analysis Report
TOWER INTL INC (TOWR): Free Stock Analysis
To read this article on Zacks.com click here.