PACCAR INC Quarterly Report for Q3 Ended Sep 30, 2012

Summary

PACCAR Inc (PCAR) reported its third quarter and nine-month results for the period ending September 30, 2012. For the quarter, net sales were $3.82 billion, down from $4.26 billion in the prior year, while net income decreased to $233.6 million ($0.66 per diluted share) from $281.6 million ($0.77 per diluted share). The nine-month period saw an increase in net sales to $13.05 billion from $11.50 billion, and net income rose to $858.1 million ($2.41 per diluted share) from $714.6 million ($1.95 per diluted share). The Truck segment experienced lower unit sales in Europe and North America during the third quarter, impacting revenue and income. However, for the first nine months, truck sales and income improved due to strong performance in North America and other markets. The Financial Services segment delivered record results, driven by higher finance margins and a lower provision for losses on receivables, offsetting some of the decline in the truck segment for the quarter. Looking ahead, PACCAR anticipates industry retail sales in the U.S. and Canada to remain strong in 2013, while Europe's market is expected to be impacted by economic uncertainty. The company is focused on capital investments for new factories and product development.

Key Highlights

• 1Consolidated net sales for Q3 2012 decreased by 10.3% year-over-year to $3.82 billion, while net income declined by 17.1% to $233.6 million.
• 2For the nine months ended September 30, 2012, consolidated net sales increased by 13.5% to $13.05 billion, and net income grew by 19.9% to $858.1 million.
• 3Truck segment revenue decreased 11.3% in Q3 2012 due to lower truck deliveries in the U.S./Canada and Europe, but increased 13.8% for the nine-month period driven by North America.
• 4Financial Services segment revenue increased 3.5% in Q3 2012 and 8.8% for the nine months, with income before taxes rising significantly by 30.1% in Q3 and 35.6% for the nine months, highlighting improved margins and lower loss provisions.
• 5The company repurchased $192.0 million of its common stock under an approved plan by September 30, 2012.
• 6PACCAR forecasts U.S. and Canada Class 8 retail sales to be between 210,000-240,000 units in 2013, while Europe is projected to be between 210,000-250,000 units.
• 7Capital investments for 2012 are expected to be between $475-$525 million, focusing on new product development and geographic expansion.

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