Falling European sales help sink Paccar's profits
BELLEVUE, Wash. -- Heavy-duty truck maker Paccar posted a 17 percent drop in third-quarter profit early Thursday. The maker of Kenworth and Peterbilt trucks said the results were a reflection of tepid economic growth in Europe and North America.
But sales to countries in South America helped offset some of the damage, and Paccar's results topped Wall Street's expectations. After the company released its third-quarter earnings report, Paccar's stock jumped $1.82, or 4.6 percent, to $41.39 in midday Thursday trading.
Paccar, based in Bellevue, Wash., said net income sank to $233.6 million in the three months ending in September, down from $281.6 million in the same quarter a year earlier.
On a per-share basis, Paccar earned 66 cents in the quarter, a drop from the 77 cents reported in the third quarter of last year. The recent quarter got a 2-cent-per-share boost from a reduction in the number of outstanding shares.
The results were a penny better than the 65 cents per share analysts had expected, according to the data provider FactSet.
Revenue from selling and leasing trucks fell 10 percent to $3.82 billion, down from $4.26 billion in the same quarter of last year. That also topped analysts' revenue forecasts of $3.56 billion.
Broken down by region, Paccar's revenue appeared to track overall economic growth. Revenue from U.S. and Canada sank 15 percent to $2.01 billion, while revenue from Europe plunged 21 percent to $996 million. Revenue from markets in the rest of the world rose 28 percent to $817.7 million.
The company said it's seeing stronger sales of its DAF Trucks to countries in South America. Paccar plans to have a DAF factory in Ponta Grossa, Brazil built soon.
In its previous quarterly earnings call, Paccar had cautioned that sluggish economic growth in the U.S. and uncertainty stemming from the European debt crisis could hinder orders for its trucks.
Over the past 12 months, Paccar's stock has traded as high as $48.22 and as low as $35.21. The shares have gained 11.6 percent this year.