BRUSSELS: PACCAR Inc. ‘s PCAR second-quarter 2016 adjusted earnings decreased to $371.7 million or $1.06 per share from $447.2 million or $1.26 per share recorded in the year-ago quarter. Earnings per share, however, topped the Zacks Consensus Estimate of $1.03.
Adjusted earnings exclude a $109.6 million favorable adjustment to the non-recurring charge established in the first quarter for the European Commission’s investigation of all European truck manufacturers. Including this, net income came in at $481.3 million or $1.37 per share.
Revenues declined 14% year over year to $4.12 billion but exceeded the Zacks Consensus Estimate of $4.06 billion. Net sales and financial services revenues fell to $4.41 billion from $5.08 billion in the second quarter of 2015.
Revenues from the Truck, Parts and Other segment decreased 14% year over year to $4.12 billion in the second quarter of 2016. The company reported pretax income of $562.5 million compared with $556.1 million a year ago.
Revenues in the Financial Services segment (comprising a portfolio of 175,000 trucks and trailers, with total assets of $12.23 billion) improved 1.2% to $297.4 million. Pre-tax income in the segment declined to $77.3 million from $90.8 million in the year-ago quarter.
PACCAR’s cash and marketable debt securities amounted to $3.40 billion as of Jun 30, 2016 compared with $3.38 billion as of Dec 31, 2015.The company generated $1.65 billion in cash from operating activities during the first half of 2016 compared with $1.19 billion in the prior-year period.
PACCAR announced that its DAF unit is investing $110 million to build a cab paint facility at its factory in Westerlo, Belgium. Meanwhile, Kenworth is investing $17 million at its factory in Chillicothe, OH to build a new automated storage and delivery system for painted cabs, hoods and sleepers.
PACCAR raised the estimate for 2016 industry sales in the above 16-ton truck market in Europe to 280,000-300,000 units from the prior range of 260,000-290,000 units. However, the estimate for Class 8 industry retail sales for the U.S. and Canada in 2016 was modified to the range of 220,000−240,000 units from the prior estimate of 220,000−250,000 vehicles.
For the full year, the company targets capital investments of $325-$375 million, and research and development expenses of $240-$260 million for aftermarket support, enhanced manufacturing facilities and new product development.
