Paccar (PCAR) Q4 2013 earnings summary

Executive summary

• FY 2013 revenue was a record $17.1238B; net income was $1,171.3M, up 5% and the third-highest annual result, marking 75 consecutive profitable years.

• Q4 revenue was $4,598.9M and net income was $334.2M, up 32% YoY and the highest quarterly result since Q1 2007.

• All segments contributed positively; year-end shareholders’ equity reached a record $6.63B.

Financial highlights

• FY operating cash flow was $2,375.7M versus $1,519.0M; year-end manufacturing cash and marketable securities were $2.93B.

• Q4 deliveries were 36,400 trucks, up 3% QoQ, reflecting European pre-buy activity ahead of Euro VI implementation.

• Currency movements added $12M to Q4 pretax earnings and $80M to revenue, with the earnings benefit mostly from the euro.

• 2013 dividends were $1.70 per share, including a $0.90 special dividend; total shareholder return was 34.9%.

Outlook and guidance

• 2014 U.S. and Canadian Class 8 retail sales forecast at 210,000–240,000 units; European above-16-tonne sales estimated at 200,000–230,000 units.

• Q1 truck deliveries expected up 5% YoY; production expected down ~10% QoQ, mostly in Europe. Q1 gross margins expected comparable to Q1 2013, with steady improvement anticipated through the year.

• Brasil truck sales above six tonnes estimated at 150,000 units in 2014; production ramp planned over 18–24 months, with the facility targeted to reach at least break-even by year-end and a long-term 20% share goal.

• 2014 capital spending planned at $350M–$400M and R&D at $225M–$275M; parts revenue growth targeted at 5% or more.