Helped by growing European demand for tractor trailers, Paccar (NASDAQ:PCAR) reported Tuesday a slightly better-than-expected third-quarter profit, leading the company to raise its quarterly dividend by 33%.
The Bellevue, Wash-based company posted net income of $119.9 million, or 33 cents a share, compared with $13 million, or 4 cents a share, in the same quarter last year.
Results for the period landed narrowly ahead of average analyst estimates polled by Thomson Reuters of 32 cents.
Revenue for the manufacturer of light to medium heavy-duty trucks and related parts was $2.3 billion, up from $1.75 billion a year ago, missing the Streetâ€™s view of $2.43 billion.
Mark Pigott, the truck makerâ€™s chief executive, said the results reflect improved demand for trucks and parts as well as improving worldwide profits from financial services.
â€śThe global economic recovery is progressing and our customers are benefiting from increased freight tonnage and higher fleet utilization rates, resulting in increased demand for Paccar products and services,â€ť he said.
Premium-quality vehicles have gained traction in Europe, with tractor sales clutching 20% market share in the region.
Paccar expects sales of its Kenworth and Peterbilt tractor-trailer trucks in the US and Canada to range between 120,000 and 130,000 vehicles this year, up 10% and 15%, respectively, from the year-earlier period, while its European unit DAF is expected to reach 170,000 units.
The company posted cash flow of $1.1 billion, which it plans to use to fund ongoing capital investments in an effort to enhance manufacturing operating efficiency and new product development.
Capital expenditures for the full-year are expected to range between $175 million and $200 million, with research and development up $230 million to $240 million, as the company seeks product and geographical expansions.
The strong results led Paccarâ€™s board of directors to approve a 33% increase to its quarterly dividend, to 12 cents from 9 cents a share, payable to stockholders of record on Nov. 19.