Paccar has reported its best-ever first quarter global revenue and profits this week revealing a 65 per cent increase in overall earnings compared with the first quarter in 2017.
The company which produces Peterbilt, Kenworth and DAF Paccar’s saw its earnings surge to $US512 million in the first three months of the year while it logged net sales of $US5.7 billion, an increase of 33 per cent compared with the same quarter a year earlier.
“The strong financial results come from a healthy US and global economy driving truck and aftermarket parts demand,”said the company’s chief executive, Ron Armstrong.
Paccar’s report was better than Wall Street investment analysts expected with demand being driven by large Class 8 sleepers and day cabs.
The need to ship more freight in the US in particular is contributing to higher sales of Paccar trucks in the heaviest Class 8 weight segment. Orders more than doubled in the U.S and Canada compared with the first quarter 2017.
The company increased the lower end of its annual U.S. and Canada sales forecast for Class 8 trucks to 265,000 from and earlier forecast 235,000 and the higher end to 285,000 from its earlier forecast 265,000 units.
“We believe there could be further increases to these forecasts,” said David Leiker, an analyst at Robert W. Baird & Co.
Paccar’s parts division also achieved record revenue in the first quarter of 2018. The company’s parts sales topped $US 940 million, an increase of 19 per cent over the same period last year. Earnings grew 27 per cent to $US191.8 million in the first quarter.
Investments in product distribution centres, increased dealer locations, expanded product lines, fleet services and e-commerce programs as well as growing market share has contributed to the growth, said David Danforth, who heads the division.
Paccar also did well in Europe, where sales of its DAF trucks increased 41 per cent. Paccar recently invested $US110 million in its Westerlo, Belgium factory to increase capacity.
The company also expanded offerings of its DAF brand lineup in Brazil, Panama and the Andean region, which includes Venezuela, Colombia, Peru, Ecuador and Bolivia.
As part of its long-term strategy, Paccar has invested $US3 billion in new facilities, products and services over the past five years.