PACCAR Inc. ( PCAR ) announced that it will pay a special cash dividend of 70 cents per share in addition to the regular quarterly cash dividend of 18 cents per share due to the robust increase in profit during the third quarter of the year and a healthy cash flow.
The special dividend is payable on January 5, 2012 to stockholders of record as of December 19, 2011 while the regular dividend is payable on March 5, 2012 to stockholders of record on February 17, 2012.
PACCAR pays dividend to its shareholders on a regular basis. In the third quarter of the year, the company even raised the dividend payment to 18 cents from 12 cents per share.
At the end of 2010, the company paid a special dividend of 30 cents per share. So this year is no exception.
The company reported a more than two-fold increase in profit to $281.6 million or 77 cents per share in the third quarter of 2011 from $119.9 million or 33 cents per share in the same quarter of 2010. The truck maker's profit exceeded the Zacks Consensus Estimate by 7 cents per share.
The increase in profit was attributable to higher truck deliveries, increased aftermarket sales and a growing financial services business worldwide.
Net sales and financial services revenues surged 68% to $4.26 billion from $2.54 billion in 2010 quarter. It was much higher than the Zacks Consensus Estimate of $3.93 billion.
Pre-tax profit was $394.7 million compared with $176.8 million in the third quarter of 2010. Cash from operations totaled $1.15 billion for the first nine months of 2011.
PACCAR expects truck deliveries in the fourth quarter to go up by 10% from the prior quarter despite economic uncertainties in Europe that could lead some of its customers to defer their order for new trucks.
The company also began construction of a new assembly facility in Ponta Grossa, Brazil. It has also opened a new technical center in Pune, India, and expanded its office in Shanghai, China.
PACCAR is the third largest manufacturer of heavy-duty trucks (with a capacity of more than 15 metric tons) in the world after Volvo ( VOLVY ) and Daimler ( DDAIF ). The company continues to gain market share, especially with its DAF nameplate.
Further, it expects to benefit from its fastest-growing businesses, PACCAR Parts and PACCAR Financial Services. It currently retains a Zacks #3 Rank on its stock, which implies a short-term (1-3 months) "Hold" rating.
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