PACCAR Inc. (NASDAQ:PCAR) Q4 2014 Earnings Conference Call - Final Transcript

Jan 30, 2015 • 12:00 pm ET


PACCAR Inc. (NASDAQ:PCAR) Q4 2014 Earnings Conference Call - Final Transcript


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Good morning, and welcome to PACCAR's Fourth Quarter 2014 Earnings Conference Call. [Operator Instructions]

I would now like to introduce Mr. Ken Hastings, PACCAR's Director of Investor Relations. Mr. Hastings, please go ahead.

Ken Hastings

Good morning. We would like to welcome those listening by phone and those on the webcast. My name is Ken Hastings, PACCAR's Director of Investor Relations. And joining me this morning are Ron Armstrong, Chief Executive Officer; Bob Christensen, President and Chief Financial Officer; and Michael Barkley, Vice President, Controller.

As with prior conference calls, if there are members of the media on the line, we ask that they participate in a listen-only mode. Certain information presented today will be forward-looking and involve risks and uncertainties, including general economic and competitive conditions that may affect expected results.

I would now like to introduce Ron Armstrong.

Ronald E. Armstrong

Good morning. I am pleased to share that 2014 was an excellent year for PACCAR with many records expanded product and service offerings and investments that provide the foundation for future growth. PACCAR achieved record revenues of $18.9 billion in 2014. Net income was $1.36 billion and increase of 16% versus a year ago and the Company's second best annual profit in history.

2014 was PACCAR's 76th consecutive year of earning a net income. These excellent results reflect the strongest North America heavy truck market retail sales since 2006. In addition, PACCAR parts and PACCAR Financial Services earned record pretax income. PACCAR celebrated several important milestones last year including Peterbilt's 75th anniversary. The delivery of Kenworth's one millions truck and the production of the one million DAF's cab in our Westerlo, Belgium factory.

More good news this week Kenworth's new vocational truck the T880 truck, equipped with the PACCAR MX-13 engine, earned "2015 Truck of the Year" from the American Truck Dealers. I am very proud of our 23,300 employees who deliver industry leading products and services to our customers everyday.

PACCAR's fourth quarter sales and financial services revenues were quarterly record $5.1 billion and quarterly net income was $394 million. Net income increased 18% compared to the results generated in the fourth quarter last year. The positive contribution of all company segment enables PACCAR to obtain the highest operating margins in our industry and to deliver excellent shareholder returns. PACCAR declared cash dividends of $1.86 per share last year, a 9% increase compared to 2013. PACCAR's total return to shareholders was 18.3% last year. Stockholders equity at year end was a record $6.75 billion. And during 2014, PACCAR repurchase 731,000 shares of stock for $42.7 million.

PACCAR delivered 40,100 trucks during the fourth quarter, a 7% increase versus the third quarter. Vehicle deliveries in the first quarter this year will be 15% to 18% higher than the first quarter last year reflecting increased production in the U.S. and Canada. Truck and other margins are forecast to be 1% to 1.5% better than last years first quarter.

Peterbilt and Kenworth achieved excellent market share of 27.9% in the U.S. and Canadian heady-duty truck