PACCAR posts strong earnings despite five weeks of closed factories; shares updates on electric vehicles

PACCAR earned net income of $147.7 million in the second quarter, compared to $619.7 million earned in the same period last year, according to the company’s latest financial statement.

Second quarter net sales and financial services revenues were $3.06 billion, compared to $6.63 billion achieved in the second quarter of 2019.

“PACCAR closed its factories for five weeks at the beginning of the quarter and has gradually resumed production while enhancing operating processes and procedures for employee health and well-being, manufacturing efficiency and customer satisfaction,” said Preston Feight, chief executive officer. “I am very proud of our outstanding employees who delivered excellent production and distribution performance while enhancing PACCAR’s rigorous health and safety standards.”

PACCAR reported first-half net income of $507.1 million, compared to $1.25 billion earned in the first six months of last year. Net sales and financial services revenues for the first six months of 2020 were $8.22 billion, compared to $13.12 billion achieved last year.

“PACCAR is in excellent financial position, with manufacturing cash and marketable securities of $4.17 billion at June 30, 2020 and bank facilities of $3.0 billion,” shared Mark Pigott, executive chairman. The company has credit ratings of A+/A1.

The company says highlights of its financial results for the second quarter of 2020 include:

Net sales and revenues of $3.06 billion.
Net income of $147.7 million.
Global truck deliveries of 18,100 units.
PACCAR Parts revenues of $823.7 million.
PACCAR Parts pre-tax income of $151.9 million.
Financial services pre-tax income of $55.5 million.
Manufacturing cash and marketable securities of $4.17 billion.
Cash generated from operations of $934.9 million.
Stockholders’ equity of $9.78 billion.

Highlights of PACCAR’s financial results for the first six months of 2020 include:

Net sales and revenues of $8.22 billion.
Net income of $507.1 million.
Capital investments of $308.8 million and R&D expenses of $137.5 million.
Financial Services pre-tax income of $103.8 million.
Cash generated from operations of $1.36 billion.
Medium-term note issuances of $1.33 billion.

“The U.S. and Canada Class 8 truck market is rebounding as state and local economies re-open,” said Mike Dozier, senior vice president. “Customers benefited from lower fuel costs, and many sectors experienced higher freight volumes and improved freight pricing as the quarter progressed. Class 8 truck industry orders in June were 28% higher than June last year.” Class 8 truck industry retail sales in the U.S. and Canada are estimated to be in a range of 160,000-190,000 trucks in 2020, though the market size and economy could be impacted if there was a resurgence of COVID-19. Peterbilt and Kenworth achieved U.S. and Canada Class 8 truck retail sales market share of 29.6% through June this year, compared to 29.1% during the same period last year.”

Battery electric vehicles

PACCAR says Kenworth, Peterbilt and DAF continue to be global leaders in zero emissions vehicles, with customers presently field testing more than 60 battery electric, hydrogen fuel cell and hybrid trucks in North America and Europe. Deliveries of PACCAR battery electric production model trucks are expected to begin in 2021.

“Industry zero emissions powertrain deliveries are expected to be modest over the next several years due to the high cost of the technology,” said Kyle Quinn, PACCAR chief technology officer. “Medium-term demand for zero emissions vehicles will be primarily in refuse, port and local delivery applications which do not require long distance travel or a network of refueling infrastructure, as well as in locations with government mandated zero emissions.”

Hydrogen fuel cell electric vehicles

Kenworth is delivering 10 hydrogen fuel cell Kenworth T680 trucks to several customers for field testing in the Port of Los Angeles. Kenworth integrated Toyota fuel cell technology with the Kenworth T680, and Shell provided hydrogen fuel and infrastructure. The trucks were produced at the Kenworth truck factory in Renton, Washington, and the PACCAR Technical Centers are providing extensive performance testing.

Peterbilt has developed three application-specific battery electric truck models, and many of these vehicles are accumulating test miles with customers. Jason Skoog, PACCAR vice president and Peterbilt general manager, commented, “Peterbilt Model 579EV trucks are deployed in port and regional haul applications; Peterbilt Model 220 trucks are being utilized in medium-duty pickup and delivery applications; and Peterbilt Model 520EVs are collecting and hauling refuse.”