PACCAR INC Quarterly Report for Q2 Ended Jun 30, 2010

Summary

PACCAR Inc (PCAR) reported a significant turnaround in the second quarter and first half of 2010 compared to the same periods in 2009, driven primarily by a strong rebound in its core Truck and Other segment. Net sales and revenues saw substantial increases, with the second quarter reaching $2.46 billion and the first half reaching $4.69 billion, up from $1.85 billion and $3.84 billion in the prior year, respectively. This growth was fueled by higher truck unit deliveries and aftermarket parts sales, indicating a recovery in the commercial transportation sector. Net income also surged, with Q2 2010 net income at $99.6 million ($.27/share) and H1 2010 net income at $167.9 million ($.46/share), a marked improvement from the $26.5 million ($.07/share) and $52.8 million ($.14/share) recorded in the prior year. The Financial Services segment experienced a slight decline in revenues but showed a substantial improvement in profitability. Income before taxes for Financial Services more than doubled in both the second quarter and first half of 2010, driven by improved finance and lease margins and a lower provision for losses on receivables, reflecting better portfolio quality. Overall, the company demonstrates a strong recovery trajectory, with increased sales and profitability across its main business segments, signaling a positive outlook for the remainder of 2010.

Key Highlights

• 1PACCAR reported a substantial increase in net sales and revenues for Q2 2010 ($2.46 billion) and H1 2010 ($4.69 billion) compared to the prior year, indicating a strong recovery in the trucking industry.
• 2Net income saw a significant jump, with Q2 2010 net income at $99.6 million ($.27/share) and H1 2010 net income at $167.9 million ($.46/share), a marked improvement over 2009.
• 3The Truck and Other segment experienced a strong rebound, with net sales up significantly due to higher truck unit deliveries and aftermarket parts sales.
• 4The Financial Services segment, despite a slight revenue dip, showed improved profitability driven by better finance/lease margins and lower loss provisions.
• 5Worldwide truck deliveries increased by 35% in Q2 and 23% in H1 2010 compared to the prior year, with notable growth in North America and Mexico/Australia.
• 6Research and Development expenditures increased in both Q2 and H1 2010, reflecting ongoing investment in new product development.
• 7The company's liquidity remains strong, with total cash and marketable debt securities at $2.19 billion as of June 30, 2010, and significant unused credit lines.

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