Paccar said Tuesday that first-quarter profit fell 20 percent as rising fuel costs and reduced freight shipments crimped demand for its...
Paccar said Tuesday that first-quarter profit fell 20 percent as rising fuel costs and reduced freight shipments crimped demand for its heavy-duty trucks.
The Bellevue truck maker’s profit dropped to $292.3 million, or 79 cents a share, while sales of its largest trucks plunged 37 percent.
Paccar, which makes Kenworth and Peterbilt trucks, lowered its 2008 industry sales forecast to “reflect market uncertainties” in the U.S. and Canada.
Chief Executive Officer Mark Pigott said sales of the industry’s biggest trucks in the U.S. and Canada would drop to between 165,000 and 185,000 this year, down from Paccar’s earlier forecast of 175,000 to 215,000.
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U.S. revenue fell $551 million to $1.26 billion, a drop mostly offset by revenue increases of $429 million in Europe and $76 million in other markets, primarily Mexico and Australia.
“Paccar has certainly benefited from having 60 percent of its business outside the United States,” Pigott said in a conference call with analysts.
Paccar shares fell $3.32, or 6.6 percent, to $46.72 Tuesday, their biggest decline since Jan. 17.
The quarterly results reflect the impact that record-high fuel prices, declining housing starts and reduced auto production have had on freight shipments in the U.S. and Canada, said Dan Sobic, a Paccar senior vice president.
“Until freight stabilizes, the whole group of truck manufacturers is probably going to have some trouble finding its footing in the near term,” said Peter Nesvold, an analyst at Bear Stearns in New York.
A year earlier, Paccar posted a profit of $365.6 million, or 97 cents.
Revenue in this year’s first quarter dropped 1 percent to $3.94 billion, the company said.
The first-quarter earnings beat estimates of 77 cents a share, the average of 10 analysts compiled by Bloomberg News.