10-KPeriod: FY2015

PACCAR INC Annual Report, Year Ended Dec 31, 2015

Filed February 16, 2016For Securities:PCAR

Summary

PACCAR Inc. reported record net sales and revenues of $19.12 billion for the year ended December 31, 2015, marking its 77th consecutive year of profitability. The company achieved its highest net income in history at $1.60 billion, with diluted earnings per share of $4.51. This strong performance was driven by increased truck sales in the U.S. and Europe, supported by robust aftermarket parts and financial services segments. Despite a challenging economic environment and currency headwinds, particularly from a weaker Euro, PACCAR demonstrated resilience and strategic execution. The company's Truck segment, accounting for 77% of total revenues, saw a 1% increase in net sales driven by higher deliveries in North America and Europe. The Parts segment experienced a slight 1% decrease in net sales, while its Financial Services segment reported a 3% decline in revenues. PACCAR continues to invest in future growth, with capital investments and R&D expenses increasing to support new product development and operational enhancements, including the introduction of the new PACCAR MX-11 engine.

Financial Highlights

35 data points
Beta

Revenue

$19.12B

Net Income

$1.60B

8.4% Net Margin

EPS (Diluted)

$3.01

Total Assets

$21.11B

Cash & Equivalents

$2.02B

Free Cash Flow

$2.27B

Financial Statements
Beta
Revenue$19.12B
Net Income$1.60B
EPS (Basic)$3.01
EPS (Diluted)$3.01
Shares Outstanding (Basic)531.90M
Shares Outstanding (Diluted)533.40M

Key Highlights

  • 1Achieved record net sales of $19.12 billion and record net income of $1.60 billion for fiscal year 2015.
  • 2Diluted earnings per share increased to $4.51 from $3.82 in the prior year.
  • 3Truck segment net sales increased by 1% to $14.78 billion, driven by higher truck deliveries in the U.S., Canada, and Europe.
  • 4PACCAR Parts segment sales saw a slight decrease of 1% to $3.06 billion, but saw an improvement in pre-tax return on revenues.
  • 5Financial Services segment revenue decreased by 3% to $1.17 billion, with pre-tax profit declining slightly.
  • 6Increased capital investments by 38% to $308.4 million and R&D expenses by 11% to $239.8 million.
  • 7The company expects industry truck sales in the U.S. and Canada to decline in 2016, while projecting growth in European truck registrations.

Frequently Asked Questions

For the fiscal year ended December 31, 2015, PACCAR reported record net sales and revenues of $19.12 billion, a 0.6% increase from 2014. The company also achieved a record net income of $1.60 billion, representing a 18% increase from the previous year. Diluted earnings per share rose to $4.51, up from $3.82 in 2014. These results reflect strong performance across its business segments, particularly in the Truck segment.

The Truck segment, PACCAR's largest, saw its net sales increase by 1% to $14.78 billion, driven by higher truck deliveries in the U.S., Canada, and Europe. The Parts segment's net sales slightly decreased by 1% to $3.06 billion, although its pre-tax return on revenues improved. The Financial Services segment's revenues declined by 3% to $1.17 billion, with a corresponding slight decrease in pre-tax profit, largely impacted by currency translation effects and lower yields.

PACCAR anticipates a softening in the truck market for 2016. In the U.S. and Canada, industry retail sales are projected to be between 230,000 and 260,000 units, a decrease from the 278,400 units sold in 2015. For Europe, truck industry registrations for vehicles over 16 tonnes are expected to increase slightly, ranging from 260,000 to 290,000 units, compared to 269,100 in 2015. The company also expects heavy-duty truck industry sales in South America to range between 70,000 and 80,000 units.

PACCAR's primary risks include the cyclical nature of the commercial truck market, which is highly sensitive to economic conditions. Other significant risks involve intense competition and pricing pressures, variability in production costs due to commodity price fluctuations and supplier capacity, liquidity and credit rating risks for its Financial Services segment, product liability, litigation, regulatory actions, and the impact of currency exchange rate fluctuations on its multinational operations.