Paccar, Volvo Optimistic for 2005

International truck manufacturers Paccar and AB Volvo reported record profits and earnings both for the third quarter and first nine months of 2004 as new truck sales continue to remain strong despite rising oil prices.

Paccar reported record profits and revenues of $246.7 million and $2.92 billion in the third quarter, up 86% and 42%, respectively, compared to the same period in 2003.

“Solid GDP [gross domestic product] growth in North America and a robust commercial vehicle replacement market, complemented by Paccar’s balanced global diversification, contributed to Paccar’s excellent earnings,” said Mark C. Pigott, chairman & CEO.

For the first nine months of 2004, profits rose 81% and revenues increased 37% to $665.4 million and $8.21 billion, respectively.

“Industry heavy-duty truck retail sales for the U.S. and Canada during 2004 will be 225,000 to 235,000 units, an increase of 35% compared to industry sales in 2003,” said Tom Plimpton, Paccar president. “Record freight volume, fleet expansion and improved carrier profitability are driving new truck orders. Profits for publicly traded truckload carriers are up nearly 50% versus the same period a year ago. U.S. and Canada sales could increase to 270,000 to 280,000 units in 2005 due to a good economy and fleet growth.”

AB Volvo reported third-quarter profits of 1,002 million SEK ($139.1 million) on 45,870 million SEK ($6.37 billion) of revenue. This marks an increase of 5% in profits and 13% in net sales over the same period last year.

Profits were up 84% over the first nine months of 2004 to 5,861 million SEK ($814.2 million) on 15% higher revenues of 144,383 million SEK ($20.05 billion) compared to the same period in 2003.

“The truck operations nearly doubled operating income compared with the year-earlier period, clearly driven by Volvo Trucks, which developed very strongly in all [global] regions,” said AB Volvo president & CEO Leif Johansson. “Also Mack Trucks showed improved profitability in North America.”

“We have raised the forecast for the heavy truck market in North America to about 240,000 trucks in 2004 and another 15 to 20% in 2005. For 2005, growth rates are expected to level off at historical high levels in both North American and European markets,” Johansson added.

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