Paccar rolls out record profit in 2004

Record fourth-quarter truck sales pushed Bellevue-based Paccar's quarterly profit up 52 percent to end the company's best year ever, Chairman and CEO Mark Pigott said yesterday.

The world's third-largest truck manufacturer, which makes Kenworth and Peterbilt trucks in North America and DAF trucks in Europe, earned $241.4 million for the quarter and a record $906.8 million for the year on annual sales of $11.4 billion.

"Paccar had the best year in its history," Pigott said in a statement.

Quarterly profit includes a $23.3 million charge for the termination of a parts-distribution contract in the United Kingdom.

The company made a record 124,000 trucks and added nearly 100 dealers worldwide in 2004.

Higher annual sales were driven by fleet and independent operators replacing aging trucks to meet rising demand for consumer goods.

Freight volumes grew 6.1 percent last year, according to a January survey by the American Trucking Association.

"In general, the whole industry is increasing," Pigott told analysts during a conference call to discuss the financial results.

"The economies are good in Europe and North America, and consumers are still spending. For most of the [truck] industry, they're essentially sold out through May."

Analysts were pleased.

"It was a great quarter," said Brian Rayle of FTN Midwest Research in Cleveland, who has a "buy" rating on the stock and doesn't own any shares.

The company's market share for heavy-duty trucks in the U.S. and Canada rose to 24.6 percent last year.

Heavy-duty truck sales could increase by 15 percent to 280,000 this year because of fleet growth and an improving economy, Paccar President Tom Plimpton said in a statement.

Although higher steel, aluminum and petroleum prices have cut into Paccar's gross margins, Pigott said he is "starting to see some leveling off of prices" and expects them to go down more this year.

Paccar's stock rose 17 cents yesterday to close at $70.83.

Kristina Shevory: 206-464-2039 or kshevory@seattletimes.com

The report includes information from Bloomberg News and Reuters.