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Paccar Profits Up as Industry’S Orders Hit Highest Level in Nearly a Decade

Bellevue-based truck-maker Paccar reported a 38 percent increase in first-quarter earnings, boosted by higher truck sales.

Paccar delivered 38,300 trucks between January and March, a 20 percent increase versus the first quarter of last year. During a conference call with analysts, Chief Executive Ron Armstrong said that was “slightly ahead of our expectations.”

“The improvement reflects increased truck deliveries in the U.S. and Canada due to a good economy, record freight demand and expansion of fleet capacity,” he said. “Looking ahead, we expect to increase truck deliveries in the second quarter by 5 percent to 7 percent compared to the first quarter, reflecting higher production rates for medium- and heavy-duty trucks in North America and Europe.”

Paccar delivered 24,400 trucks in the U.S. and Canada, up 31 percent from last year. European deliveries were up 9 percent to 10,100 trucks and other countries, including Mexico, South America and Australia, delivered 3,800, which was down 3 percent from the same quarter last year.

For the first quarter, the company reported a profit of $378.4 million, or $1.06 a share, up from $273.9 million, or 77 cents a share, in the same period the year before.

Truck sales were $3.77 billion in the first quarter — a 13 percent increase over the year. Paccar Parts, which has more than 2,000 DAF, Kenworth and Peterbilt service locations around the world supporting truck owners, generated $752.7 million, a 4 percent increase. Total revenue was $4.83?billion, compared with $4.38 billion last year — a 10 percent increase.

On the call with analysts, Armstrong said industry truck orders for the U.S. and Canada in each of the last two quarters were the highest since 2006. Peterbilt and Kenworth trucks’ combined share of the U.S. Canadian market is more than 27 percent year to date, he said.

The main Kenworth and Peterbilt factories “are manufacturing at record levels, reflecting the strong market,” Dan Sobic, Paccar executive vice president, said in a statement.

Paccar estimates U.S. and Canadian industrywide sales of Class 8 trucks sales will be 260,000 units to 290,000 units this year, up from 250,000 units in 2014. The stronger market, in part, reflects the state of the housing and automotive industries in the U.S., which create a large amount of freight, Armstrong said.

Class 8 trucks are the largest trucks in the U.S. and include semi trucks and dump trucks that are rated to carry more than 33,000 pounds.

Paccar said Tuesday it is unable to estimate what potential fine might result from an investigation by the European Commission into possible anti-competitive practices in the European Union.

Paccar is one of several heavy-and medium-duty truck producers that the commission began investigating in January 2011. Last November the commission sent a “statement of objections” to each company, informing them of its suspicions of anti-competitive practices.

The commission indicated that it will seek to impose significant fines on those manufacturers.

During Tuesday’s annual shareholders meeting at the Kenworth factory in Renton, shareholders approved an advisory measure urging the company to vote each year on the entire board of directors, rather than just one third. A binding vote will take place at next year’s meeting.

After the meeting, the company announced a regular quarterly cash dividend of 22 cents per share.

Paccar shares closed Tuesday at $66.72, up $2.84, or 4.5 percent.