Monday, March 2, 2015

2 Factors That Can Fuel Truck Maker Paccar's Growth; Wait For A Drip

This article was first published at Seeking Alpha on February 8, 2015

By Sarfaraz A. Khan. Research Asst. Adnan Mushtaq

The latest truck order numbers released by ACT Research show continued strength in the North American market, which was highlighted by Paccar (NASDAQ:PCAR), the second largest North American heavy-duty truck manufacturer when the company released its fourth quarter results last week.

In January, the Class 8 truck orders for North America climbed by 2.4% year-over-year and dropped by 19.7% from the previous month to 35,400. Credit Suisse's analyst Jamie Cook wrote in a research report emailed to me that the numbers were largely in-line with expectations. Once again, the growth was due in large part to improving economy and strong carrier profitability. Cook is expecting similar numbers for February in the mid-30,000 range, albeit February is usually around 4% weaker than January due to the seasonal impact.

Paccar has recently reported 18% year-over-year increase in net income to $394.3 million, or $1.11 a share on the back of 11% increase in revenues to $5.12 billion. Excluding the positive impact from taxes, the fourth quarter earnings were $1.09 a share.

Paccar installed its MX-13 engine, which the company launched in mid-2010, in 37% of its Kenworth and Peterbilt heavy duty trucks. The gaining popularity of this engine could be bad news for Cummins (NYSE:CMI), the largest diesel engine manufacturer and leading supplier of engines to almost every … read full article at Seeking Alpha.