Paccar posts most profitable quarter, but sales outlook downshifted

Bellevue-based Paccar, the world's third- largest truckmaker, reported its most profitable quarter ever and warned 2007 sales may slow as changes in U.S. emissions standards raise prices.

Second-quarter net income rose 53 percent to $369.9 million, or $2.21 a share, from $241.5 million, or $1.39 a share, a year earlier, Paccar said in a statement. Sales rose 17 percent to $4.17 billion.

Sales at Paccar's financial-services arm, which leases trucks and trailers, rose 27 percent to $231.4 million. Customers have added to their fleets before expected price increases take effect next year because of new engine parts that will be required to meet stricter emissions laws.

The company lowered its forecast for 2007 industrywide sales in the U.S. and Canada to 200,000 to 250,000 heavy trucks.

That's a 19 percent to 38 percent decline from sales expectations for this year, and compared with Paccar's earlier forecast of a 15 percent to 20 percent decrease in 2007, UBS Investment Research analyst David Bleustein said in a research note today. Bleustein kept his "neutral" rating on the shares, citing the "severe decline" in truck sales.

Paccar's shares fell $1.29, or 1.6 percent, to $77.63 in midday trading. They have gained 12 percent this year.