PACCAR Inc. (PCAR) has posted a profit of $57.5 million or 16 cents per share (excluding special items), compared to $113.1 million or 31 cents per share in the same quarter of 2008. With this, the company outdid the Zacks Consensus Estimate of 7 cents per share. Net sales and financial service revenues declined 23% to $2.24 billion.

For 2009, PACCAR reported income of $111.9 million 31 cents per share compared to $1.02 billion or $2.78 per share in 2008. The income is higher than the Zacks Consensus Estimate of 24 cents per share. Net sales and financial service revenues slashed 46% to $8.09 billion.

Revenue from PACCAR’s Truck segment fell 24% to $2 billion in the fourth quarter and plummeted 48% to $7.1 billion in 2009. In the year, PACCAR’s trucks under the DAF nameplate achieved a market share of 14.8% in the above 15-tonne market, the highest share in its 81-year history. On the other hand, the Kenworth and Peterbilt nameplates achieved a combined share of 25.1% of the U.S. and Canadian Class 8 retail market and 15.3% share of the Class 6-7 retail market in 2009.

PACCAR Financial Services posted a pretax income of $35.6 million in the quarter compared to the $45.4 million earned in the fourth quarter of 2008. Revenue in the quarter declined 13% to $254.9 million. For the full year, revenue dipped 20% to $1.01 billion and pretax income was $84.6 million compared to $216.9 million a year ago. The decline in annual profit was attributable to lower finance margins and higher truck repossessions in Europe.
 
Financial Position
 
PACCAR had cash and cash equivalents of $2.1 billion as of December 31, 2009. Long-term debt increased to $172.3 million as of that date from $19.3 million as of December 31, 2008. The long-term debt-to-capitalization ratio was as low as 3% as of December 31, 2009.
  
In 2009, cash flow from operations increased to $1.4 billion from $1.3 billion in 2008. Capital expenditures stood at $128 million in the year compared to $463 million in 2008.
 
Outlook
 
PACCAR expects sales for above 15-ton vehicles to lie in the range of 150,000–180,000 units in 2010. The U.S. and Canadian Class 8 retail sales are projected to be in the range of 110,000-140,000 units during the year 2010.

PACCAR plans to increase its capital investments in 2010 as the economy improves. The company has estimated capital expenditures of $175–$200 million, and research and development expenses of $225–$250 million, which are targeted at new products and for enhancing operating efficiency.

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