In their respective second-quarter earnings reports, two global truck makers pointed out that North American commercial truck orders could soften in this year’s second half.
“Paccar [parent of Kenworth and Peterbilt] reported increased revenues and net income for the second quarter of 2012," said Mark Pigott, chairman & CEO. "Paccar's second- quarter results reflect the benefits of higher truck sales in North and South America and good financial services results worldwide as compared to the second quarter of 2011.”
However, Pigott added that the “weak economic growth in the United States, coupled with the ongoing uncertainty in the Eurozone, could dampen truck orders for the remainder of 2012.”
Dan Sobic, Paccar executive vice president, said that the OEM expects Class 8 industry retail sales in the U.S. and Canada to be in the range of 210,000 to 230,000 vehicles in 2012. That compares to industry retail sales in 2011 of 197,000 units. “Our customers are benefiting from higher freight tonnage, improved fleet utilization rates and lower fuel prices," he noted.
According to Volvo Group (parent of Volvo and Mack) president & CEO Olof Persson , Volvo Group’s sales continued to grow during the second quarter. Persson said net sales rose 6% to SEK (Swedish Krona) 83.9 billion, which he said represented the highest sales so far for a second quarter.
“The downturn in Brazil and Western Europe was offset by growth primarily in North America, as well as by higher sales in Eastern Europe and Africa,” said Persson.
“The second quarter saw [global] truck deliveries decline by 2% to 58,800 vehicles,” he continued. “Lower deliveries to markets in Western Europe and Brazil were almost offset by increases in North America, Africa and Eastern Europe. The total order intake amounted to almost 53,000 trucks during the second quarter, representing a decline of 19% compared with the second quarter of 2011.
This decline, according to Persson, was “mainly driven by the North American market, which had a very high order intake in the second quarter of last year, and a further weakening in Southern Europe.”
He explained that while North America deliveries rose by 34% to 13,800 trucks, the order intake declined “as a result of customers making substantial orders at the end of 2011 and the beginning of 2012 and have now adopted a more cautious stance in terms of orders as a result of growing concerns regarding the U.S. economy.
“Current lower demand means that we are manufacturing at a pace which is slightly too high and are preparing to balance production to meet current demand during the autumn,” continued Persson.
He added that while “in the case of North America it is difficult to assess the second half of the year, we retain our assessment that the overall market will amount to about 250,000 heavy-duty trucks during 2012.”
Paccar stated that that it earned $297.2 million ($0.83 per diluted share) for the second quarter of 2012, a 24% increase compared to $239.7 million ($0.65 per diluted share) earned in the second quarter last year. Second quarter net sales and financial services revenues were $4.46 billion, compared to $3.96 billion reported in 2011. Net sales and financial services revenues for the first six months of 2012 were $9.23 billion, up 27% compared to $7.24 billion last year. For the first six months of 2012, PACCAR reported net income of $624.5 million ($1.75 per diluted share), an increase of 44% compared to the $433.0 million ($1.18 per diluted share) recorded in 2011.
Volvo Group reported that its operating income totaled SEK 7.3 billion, which includes a positive impact of SEK 495 M as a result of VAT [Value-added tax] credits in Brazil. The company said its operating margin of 8.7% is “slightly lower” than the year-earlier quarter, “due primarily to a change in market mix. The operating cash flow amounted to a positive SEK 2.5 billion.”
